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UN experts have called for Julian Assange to be released from prison and criticised the British government for breaching his human rights. The WikiLeaks publisher was jailed for 50 weeks on Wednesday for breaking bail conditions imposed seven years earlier by seeking asylum in the Ecuadorian embassy in London. The UN working group on arbitrary detention (WGAD) said it was deeply concerned by the “disproportionate sentence” imposed on Assange for violating the terms of his bail, which it described as a “minor violation”. The group has twice previously called for Assange to be freed, after it judged his confinement to the Ecuadorian embassy by the threat of arrest should he leave amounted to arbitrary detention.

“The working group regrets that the government has not complied with its opinion and has now furthered the arbitrary deprivation of liberty of Mr Assange,” it said in a statement on Friday. “It is worth recalling that the detention and the subsequent bail of Mr Assange in the UK were connected to preliminary investigations initiated in 2010 by a prosecutor in Sweden. It is equally worth noting that that prosecutor did not press any charges against Mr Assange and that in 2017, after interviewing him in the Ecuadorian embassy in London, she discontinued investigations and brought an end to the case. “The working group is further concerned that Mr Assange has been detained since 11 April 2019 in Belmarsh prison, a high-security prison, as if he were convicted for a serious criminal offence. This treatment appears to contravene the principles of necessity and proportionality envisaged by the human rights standards.

“The WGAD reiterates its recommendation to the government of the United Kingdom, as expressed in its opinion 54/2015, and its 21 December 2018 statement, that the right of Mr Assange to personal liberty should be restored.” A government spokesperson said: “The UK has a close working relationship with UN bodies and is committed to upholding the rule of law. Sentencing is a matter for our independent judges, who take into account the full facts of each case, and the law provides those convicted with a right of appeal.” Assange appeared in court on Thursday via video link from Belmarsh as he began a legal fight against extradition to the US, where he is wanted on charges relating to the publication of secret US files leaked by Chelsea Manning, a US intelligence analyst who was subsequently jailed.

Attorney General William Barr told the Senate Judiciary Panel this week that he has assembled a team at the Justice Department to probe whether the spying conducted by the FBI against the Trump campaign in 2016 was improper, reports Bloomberg. Barr suggested that he would focus on former senior leaders at the FBI and Justice Department. “To the extent there was overreach, what we have to be concerned about is a few people at the top getting it into their heads that they know better than the American people,” said Barr. Barr will also review whether the infamous Steele dossier – a collection of salacious and unverified claims against Donald Trump, assembled by a former British spy and paid for by the Clinton campaign – was fabricated by the Russian government to trick the FBI and other US agencies.

(Will Barr investigate whether Steele made the whole thing up for his client, Fusion GPS?) “We now know that he was being falsely accused,” Barr said of Trump. “We have to stop using the criminal justice process as a political weapon.” Mueller’s report didn’t say there were false accusations against Trump. It said the evidence of cooperation between the campaign and Russia “was not sufficient to support criminal charges.” Investigators were unable to get a complete picture of the activities of some relevant people, the special counsel found.

Although Barr’s review has only begun, it’s helping to fuel a narrative long embraced by Trump and some of his Republican supporters: that the Russia investigation was politically motivated and concocted from false allegations in order to spy on Trump’s campaign and ultimately undermine his presidency. -Bloomberg. As Bloomberg notes, Barr’s review could receive a boost by a Thursday New York Times article acknowledging that the FBI sent a ‘honeypot’ spy to London in 2016 to pose as a research assistant and gather intelligence from Trump foreign policy adviser George Papadopoulos over possible Trump campaign links to Russia.

“..beyond even the wicked Hillary Clinton to the sainted former president Obama..” “..Mr. Obama’s CIA chief, John Brennan, his NSA Director James Clapper, a baker’s dozen of former Obama top FBI and DOJ officials, including former AG Loretta Lynch, and sundry additional players..”

Mr. Barr’s stolid demeanor during the Wednesday session was a refreshing reminder of what it means to be not insane in the long-running lunatic degeneration of national politics. Of course, the reason for the continued hysteria among Democrats is that the two-year solemn inquiry by the august former FBI Director, Mr. Mueller, is being revealed daily as a mendacious fraud with criminal overtones running clear through Democratic ranks beyond even the wicked Hillary Clinton to the sainted former president Obama, who may have supervised his party’s collusion with foreign officials to interfere in the 2016 election. Mr. Barr’s hints that he intends to tip this dumpster of political subterfuge, to find out what was at the bottom of it, is being taken as a death threat to the Democratic Party, as well it should be.

A lot of familiar names and faces will be rolling out of that dumpster into the grand juries and federal courtrooms just as the big pack of White House aspirants jets around the primary states as though 2020 might be anything like a normal election. In short and in effect, the Democratic Party itself is headed to trial on a vector that takes it straight into November next year. How do you imagine it will look to voters when Mr. Obama’s CIA chief, John Brennan, his NSA Director James Clapper, a baker’s dozen of former Obama top FBI and DOJ officials, including former AG Loretta Lynch, and sundry additional players in the great game of RussiaGate Gotcha end up ‘splainin’ their guts out to a whole different cast of federal prosecutors?

It’s hardly out of the question that Barack Obama himself and Mrs. Clinton may face charges in all this mischief and depravity. It’s surely true that the public is sick of the RussiaGate spectacle. (I know readers of this blog complain about it.) But it’s no exaggeration to say that this is the worst and most tangled scandal that the US government has ever seen, and that failing to resolve it successfully really is an existential threat to the project of being a republic. I was a young newspaper reporter during Watergate and that was like a game of animal lotto compared to this garbage barge of malfeasance.

[..] It seems more than merely possible that the entire Mueller Investigation was a ruse from the start to conceal all this nefarious activity. It is even more astounding to see exactly what a lame document the Mueller Report turned out to be. It was such a dud that even the Democratic senators and congresspersons who are complaining the loudest have not bothered to visit the special parlor set up at the Department of Justice for their convenience to read a much more lightly redacted edition of the report.

• It has occasionally been suggested that Russiagate was originated by high-level US officials who disliked candidate Trump’s pledge to “cooperate with Russia.” This suspicion remains unproven, but throughout, Mueller repeatedly attributes to Trump campaign members and Russians who interacted in 2016, potentially in sinister or even criminal ways, a desire for “improved U.S.-Russian relations,” for “bringing the end of the new Cold War,” for a “new beginning with Russia.” Even Russian President Vladimir Putin is reported to have wanted “reconciliation between the United States and Russia.”

The result is, of course, to discredit America’s once-mainstream advocacy of détente. Mueller even brands American pro-détente views—as Presidents Eisenhower, Nixon, and Reagan held in the 20th century—as “pro-Russia foreign policy positions”. Does this mean that Americans who hold pro-détente views today, as I and quite a few others do, are to be investigated for their “contacts” with Russians in pursuit of better relations? Mueller seems to say nothing to offset this implication, which has already adversely affected a few Americans mentioned and not mentioned in his report.

• Nor does Mueller consider alternative scenarios and explanations, as any good historical or judicial investigation must do. For example, he accepts uncritically the Clinton/Democratic National Committee allegation that Russian agents hacked and disseminated their emails in 2016. Again, maybe so, but why did he not do his own forensic examination or even mention the alternative finding by VIPS that they were stolen and leaked by an insider? Why did he not question Julian Assange, who claimed to know how and through whom the emails reached WikiLeaks? And how to explain Mueller’s minimal interest in the shadowy professor Joseph Mifsud, who helped entrap George Papadopoulos in London? Mueller reports that Mifsud “had connections to Russia” (p. 5), although a simple Google search suggests that Mifsud was indeed an “agent” but not a Russian one, as widely alleged in media accounts.

[..] as Obama saw it, the “real blame” for Clinton’s loss “lay squarely with Clinton” – despite her many well-documented attempts to make every conceivable excuse, from blaming Bernie Sanders and his misogynistic “Bernie Bros” to misogynistic Trump supporters. But as Obama vented, nobody forced Clinton to take money from Goldman Sachs, or set up an illicit private email server at her house in Chappaqua. In a stinging passage Baker writes: ‘To Obama and his team, however, the real blame lay squarely with Clinton. ‘She was the one who could not translate his strong record and healthy economy into a winning message. ‘Never mind that Trump essentially ran the same playbook against Clinton that Obama did eight years earlier, portraying her as a corrupt exemplar of the status quo.

‘She brought many of her troubles on herself. No one forced her to underestimate the danger in the Midwest states of Wisconsin and Michigan. ‘No one forced her to set up a private email server that would come back to haunt her. ‘No one forced her to take hundreds of thousands of dollars from Goldman Sachs and other pillars of Wall Street for speeches. ‘No one forced her to run a scripted, soulless campaign that tested eighty-five slogans before coming up with ‘Stronger Together’. Obama tried to keep his cool in the weeks afterwards and texted his speechwriter Ben Rhodes: ‘There are more stars in the sky than sand on the earth’. But soon he was unable to contain his rage which escalated after he met Trump in the Oval Office.

Baker writes that despite being cordial in public he afterwards summoned Rhodes who told him that Trump ‘peddles in b*******’ Rhodes said: ‘That character has always been part of the American story. You can see it right back to some of the characters in Huckleberry Finn’. Obama replied: ‘Maybe that’s the best we can hope for’.

The Conservatives have lost 1,334 councillors, with Theresa May saying voters wanted the main parties to “get on” with Brexit. Labour also lost 82 seats in the English local elections, in which it had been expected to make gains. But the strongly pro-EU Lib Dems gained 703 seats, with leader Sir Vince Cable calling every vote received “a vote for stopping Brexit”. The Greens and independents also made gains, as UKIP lost seats. All 248 English councils holding elections have now announced their full results.

While the scale of the Conservative election losses is larger than expected, Labour had predicted it would gain seats, having suffered losses the last time these council seats were contested, in 2015. The Green Party has added 194 councillors, while the number of independent councillors has risen by 612. UKIP, which enjoyed large gains in 2015, lost 145 seats. Results from Northern Ireland’s 11 councils are also being announced. No local elections are taking place in Scotland and Wales.

New polling has found that 61% of those who would vote in a second referendum would vote to Remain in the European Union. The YouGov survey for KIS Finance found that between the choice of Theresa May’s Brexit deal or remaining in the EU, 61% of those who confirmed they would vote stated they wanted the UK to stay in the European Union. When a no-deal scenario is added into the mix, 53% of people would vote to Remain, while 34% would vote for no-deal, and just 12% would vote for Theresa May’s deal.

The research also uncovered that 1 in 10 have put off important financial decisions, such as buying their first home, moving house, spending money on home improvements, investing and making major purchases such as a car, until the future of Brexit is clear. In London this figures rises to 1 in 5 who have delayed key financial decisions as a direct result of Brexit. In Wales, 1 in 6 have been affected and in Scotland 1 in 7 have postponed major financial decisions. The polling was carried out days ahead of the local elections, 23rd – 24th April 2019. Further information can be found on the KIS FInance website.

Two bills that are called “Medicare for all” bills by their supporters have just been introduced in Congress. On February 27, Representative Pramila Jayapal introduced the Medicare For All Act of 2019, HR 1384 , in the House of Representatives. On April 10, Senator Bernie Sanders introduced a bill bearing the same name in the Senate, S 1129. The cost-containment section in Representative Jayapal’s bill will cut health care costs substantially without slashing the incomes of doctors and hospitals. Senator Sanders’ bill cannot do that. In this article, I explain the differences in the cost containment sections of the two bills and call upon Senator Sanders to correct two defects in his bill that minimize its ability to reduce costs.

Defect number one: S 1129 authorizes a new form of insurance company called the “accountable care organization” (ACO). Defect number two: S 1129 fails to authorize budgets for hospitals. Representative Jayapal’s bill, on the other hand, explicitly repeals the federal law authorizing ACOs, and it authorizes budgets for individual hospitals. I write this essay as both a long-time organizer, writer and speaker for a single-payer (the older name for “Medicare for all” system) and a strong supporter of Senator Sanders. Bernie’s enthusiastic support for a “single payer” solution to the American health care crisis has added millions of new supporters to the single-payer movement.

But precisely because he is now the most recognizable face of the single-payer movement, it is extremely important that all of us, whether we’re already in the single-payer movement or we just long for a sane and humane health care system, encourage Bernie to fix the defects in his bill. To explain the two defects in S 1129, I must first explain why a single-payer bill like Representative Jayapal’s will be effective at cutting the high cost of American health care. I begin by explaining the origin and meaning of the “single payer” label. I will then describe the two defects in S 1129 in more detail.

As soon as you read that Yellow Vests attacked a hospital, you know this is a hoax. Or I hope you do. But I bet the probe that will now follow will stop at looking at evidence of an attack, not at why the government has spread false rumors.

Paris’ prosecutor has begun a probe after May Day protesters allegedly entered a famed Paris hospital and tried to force the door to its intensive care unit. But supporters of the “gilets jaunes” (“yellow vests”), who were among demonstrators during a fiery march in the French capital on Wednesday, said they were just seeking refuge from tear gas fired by police. Thirty-two people were in police custody under charges of “gathering to commit degradations or violence,” the prosecutor’s office told Euronews. They were released on Thursday evening as investigations continue, the prosecutor’s office said. France’s Interior Minister Christophe Castaner initially said the hospital was ‘attacked’ by dozens of anti-capitalist militants and black blocks, but by Friday morning he had changed his position.

“I shouldn’t have used the word ‘attack’. The term ‘violent intrusion’ used by the hospital director seems to be more accurate giving the videos on it shared ever since,” admitted Castaner during a press conference. [..] But supporters of the “yellow vest” movement, whose protests have shaken the government of President Emmanuel Macron over the past half year, insisted the demonstrators were merely seeking refuge from tear gas fired by police. The incident came during a hugely tense May Day which saw police clash with hardline protesters on the sidelines of the annual labour union march. The hospital is close to the Place d’Italie where the march ended. Salome Fournet-Fayas, a 26-year-old set designer who was demonstrating on May Day, was at the hospital with other protesters.

She told Euronews that she and other demonstrators were following the official itinerary for the rally when police fired tear gas at them in such quantity that she almost vomited. Fournet-Fayas said that as demonstrators were fleeing tear gas and possible flash ball shots, they noticed that the hospital gates were open. So they entered and quietly waited for things to calm down on the grass, in the hospital courtyard, without going inside the building. Asked whether some violent protesters might have tried to attack the hospital, she replied that “everyone was very calm.” She said she felt “revolted” by the government’s account of the events. “No one tried to attack to attack this hospital,” she assured. “We were just there waiting.”

This week, Liberian activist Alfred Brownell won the prestigious Goldman Environmental prize for his efforts to protect Liberia’s rainforest from the depredations of a multinational palm oil producer. But new research, showing that deforestation in Africa is increasing at an unprecedented rate, suggests the continent needs plenty more Alfred Brownells if it is to have a hope of protecting its trees — and, ultimately, the planet itself. “We are in a war for this planet,” said Brownell from Northeastern University in Boston. He was forced into exile after he formed a public interest law group that used legal means to prevent the exploitation of Liberian rainforests by a Singapore-based palm oil producer.

“It’s not just a struggle to protect remote towns and villages, or just to protect their sacred sites, or just to protect their land and their crops, their way of life, their culture, their religion. It’s also about protecting these important forests in West Africa which are producing oxygen and absorbing carbon and, in essence, making an enormous contribution in the mitigation of climate change,” he said. [..] Because of their age,primary forests contain more carbon than other forests, making them invaluable in the climate-change fight. Losing them is a double blow: not only is all this carbon released into the atmosphere, but the land where the forests used to be no longer sucks carbon from the atmosphere.

The main problem areas are Brazil and Indonesia’s rainforests, which together account for 46%of primary rainforest loss in 2018. But this year researchers discovered a new disturbing development: trees in Africa are disappearing at an unprecedented rate. Three regions in Africa are of particular concern: The first is Ghana and Côte d’Ivoire, which both experienced dramatic losses in primary forest cover between 2017 and 2018 (60% and 26% respectively). Although it is difficult to pinpoint exactly what drove the loss, illegal mining is likely to have played a major role, as are expanding cocoa plantations.

The second is the Democratic Republic of Congo, which is behind only Brazil in terms of the total area of primary forest lost.“In the … Congo, primary forest loss was 38% higher in 2018 than it was from 2011-2017. Madagascar is the third area of concern. It lost 2% of its primary forests in 2018. That is a higher proportion than any other tropical country. GFW attributes this mostly to small-scale forest clearing for agriculture and fuel.

Like its predecessor, the report is a compilation of reams of academic studies, in this case on subjects ranging from ocean plankton and subterranean bacteria to honey bees and Amazonian botany. Following previous findings on the decimation of wildlife, the overview of the state of the world’s nature is expected to provide evidence that the world is facing a sixth wave of extinction. Unlike the past five, this one is human-driven. Mike Barrett, WWF’s executive director of conservation and science, said: “All of our ecosystems are in trouble. This is the most comprehensive report on the state of the environment. It irrefutably confirms that nature is in steep decline.”

Barrett said this posed an environmental emergency for humanity, which is threatened by a triple challenge of climate, nature and food production. “There is no time to despair,” he said. “We should be hopeful that we have a window of opportunity to do something about it over these two years.” The report will sketch out possible future scenarios that will vary depending on the decisions taken by governments, businesses and individuals. The next year and a half is likely to be crucial because world leaders will agree rescue plans for nature and the climate at two big conferences at the end of 2020.

That is when China will host the UN framework convention on biodiversity gathering in Kunming, which will establish new 20-year targets to replace those agreed in Aichi, Japan, in 2010. Soon after, the UN framework convention on climate change will revise Paris agreement commitments at a meeting in either the UK, Italy, Belgium or Turkey.

Earth’s population has doubled in 50 years. Not only are we living longer than ever before, we are also consuming more. Today, humans extract around 60 billion tonnes of resources from Nature each year — a rise of 80 percent in just a few decades. And we are leaving our mark in other ways. Since 1980, manmade greenhouse gas emissions have doubled, adding at least 0.7C to global temperatures. We dump up to 400 million tonnes of heavy metals, toxic sludge and other waste into oceans and rivers each year. The report, compiled from more than 15,000 academic papers and research publications, estimates that 75 percent of land, 40 percent of oceans and 50 percent of rivers “manifest severe impacts of degradation” from human activity.

The document, the first of its kind in 15 years, paints a picture of rife inequality, with richer nations consuming vastly more per capita than poorer ones battling to retain their natural resources. Indeed, per capita demand for materials is four times more in high- than in low-income economies. In Europe and North America, humans now consume several times the recommended intake of meat, sugar and fat for optimal health, while 40 percent of the world’s people lack access even to clean drinking water. The inequality gap is huge and widening: GDP per head is already 50 times larger in wealthy nations than in poor ones. Industrial fishing is destroying our oceans, according to the report. It found that 70,000 industrial fishing vessels operate in at least 55 percent of the world’s high seas.

Nearly three quarters of major marine fish stocks are depleted or exploited to the limit of sustainability, despite efforts from the fishing community to implement quotas and drive down overfishing. On land, the situation looks even bleaker. A third of all land is now given over to agriculture and 75 percent of freshwater resources is dedicated to food production. In all, at least a quarter of all greenhouse gas emissions come from land clearing, crop production and fertilisation, the vast majority of which comes from animal-based food production.

New York Zoo, 1963 “You are looking at the most dangerous animal in the world. It alone of all the animals that ever lived can exterminate (and has) entire species of animals. Now it has the power to wipe out all life on earth.”

It is sad that so many people still look at the Fed to save the “markets”. Sad and blind. Like nobody has any interest in having functioning markets and societies, and it’s all only about a quick buck.

In March 2009 markets bottomed on the expansion of QE1 (quantitative easing, part one), which was introduced following the initial announcement in November 2008. Every major correction since then has been met with major central-bank interventions: QE2, Twist, QE3 and so on. When market tumbled in 2015 and 2016, global central banks embarked on the largest combined intervention effort in history. The sum: More than $5 trillion between 2016 and 2017, giving us a grand total of over $15 trillion, courtesy of the U.S. Federal Reserve, the European Central Bank and the Bank of Japan:

When did global central-bank balance sheets peak? Early 2018. When did global markets peak? January 2018. And don’t think the Fed was not still active in the jawboning business despite QE3 ending. After all, their official language remained “accommodative” and their interest-rate increase schedule was the slowest in history, cautious and tinkering so as not to upset the markets. With tax cuts coming into the U.S. economy in early 2018, along with record buybacks, the markets at first ignored the beginning of QT (quantitative tightening), but then it all changed. And guess what changed? Two things. In September 2018, for the first time in 10 years, the U.S. central bank’s Federal Open Market Committee (FOMC) removed one little word from its policy stance: “accommodative.” And the Fed increased its QT program. When did U.S. markets peak? September 2018.

[..] Global central banks did the dirty work for the Fed between 2016 and 2017, adding ever more artificial liquidity. But then the ECB slowed its QE program and finally ended it in late 2018. How did the DAX (German stock index) handle all that removal in artificial liquidity? Not well.

[..] don’t mistake this rally for anything but for what it really is: Central banks again coming to the rescue of stressed markets. Their action and words matter in heavily oversold markets. But the reality remains, artificial liquidity is coming out of these markets. [..] What’s the larger message here? Free-market price discovery would require a full accounting of market bubbles and the realities of structural problems, which remain unresolved. Central banks exist to prevent the consequences of excess to come to fruition and give license to politicians to avoid addressing structural problems.

The yellow vest protesters who have entered their eighth week of street rallies are trying to topple President Macron and his administration, according to a French government spokesman. The movement made up largely of working and lower middle-class citizens has won widespread public approval as it is seen by many as a means of making the voices of ordinary men and women heard. But after months of unrest in Paris and other French cities, Benjamin Griveaux said the gilets jaunes are not interested in the three-month debate on the reforms promised by Mr Macron, but instead want to overthrow the young president. Speaking at a press conference on Friday after the weekly cabinet meeting, Mr Griveaux said members of the movement “seek insurrection and basically want to overthrow the government”.

He added: “They are henceforth involved in a political struggle to contest the legitimacy of the government and of the president of the republic. “Those who called for a debate don’t want to participate in a big national debate.” Mr Macron said he intends to write a letter to the French people this month outlining how he will deliver his ambitious plans. [..] ‘Angry France’, one of the group which makes up the yellow vests, rejected the president’s offer of a national debate. A statement issued by the group read: “Mr President, this movement that you don’t recognise is nevertheless spreading and strengthening itself even as your fellow citizens are cudgelled, gassed and detained for hours in an unbelievable lack of respect for citizens’ rights.”

I have seldom seen a poll on a subject dividing the nation for which the lessons are so clear. The biggest survey yet conducted on Brexit shows that Remain would comfortably win a referendum held today – and that Labour would crash to a landslide election defeat if it helped Brexit go ahead. YouGov questioned more than 25,000 people between 21 December and last Friday. It tested two referendum scenarios. If the choice is Remain versus the government’s withdrawal agreement, Remain leads by 26 points: 63% to 37%. If the choice is Remain versus leaving the EU without a deal, Remain wins by 16 points: 58% to 42%. The difference is explained by the views of those who voted Leave in 2016.

Many of them want a clean break with Brussels, but back away from an agreement that fails to redeem the promise in 2016 to “take back control”. Among all voters, only 22% support the government’s deal. Among Leave voters the figure is not much higher: 28%. The larger point is that the nature of the choice has changed since 2016 – 52% voted Leave when it was a general aspiration with little apparent downside. Today support for Brexit is significantly lower when Leave is more clearly defined. This pattern is familiar to referendums in different countries: many people support the broad idea of change, but back away when the details are laid out. They want “change”, but not “this change”. That is clearly the case today: 80% of people who voted Leave two years ago still say they want Brexit to go ahead; but the figure falls to 69% if the choice is a “no deal” Brexit, and only 55% if the referendum offers the withdrawal agreement.

The rest say they don’t know, or switch to Remain. (The respective loyalty rates on the other side – Remain voters in 2016 who would stick with Remain today – are significantly higher.) [..] The conventional voting intention question produces a six-point Conservative lead (40% to 34%). This is bad enough for an opposition that ought to be reaping electoral dividends at a time when the government is in crisis. However, when voters are asked how they would vote if Labour failed to resist Brexit, the Conservatives open up a 17-point lead (43% to 26%). That would be an even worse result than in Margaret Thatcher’s landslide victory in 1983, when Labour slumped to 209 seats, its worst result since the 1930s.

The prime minister has urged MPs to back her Brexit deal, saying it is the only way to honour the referendum result and protect the economy. Writing in the Mail on Sunday, Theresa May said her critics – both Remainers and Brexiteers – risk damaging democracy if they oppose her plan. But a poll carried out for the People’s Vote campaign suggests fewer than one in four voters support her Brexit deal. MPs are due to vote on whether to back Mrs May’s Brexit plan next week. The UK is due to leave the EU on 29 March 2019 – regardless of whether there is a deal with the EU or not. A deal on the terms of the UK’s divorce and the framework of future relations has been agreed between the prime minister and the EU – but it needs to pass a vote by MPs in Parliament before it is accepted.

The House of Commons vote had been scheduled to take place in December but Mrs May called it off after it became clear that not enough MPs would vote for her deal. The debate on the deal will restart on Wednesday, with the crucial vote now expected to take place on 15 January. Writing in the Mail, Mrs May said: “The only way to both honour the result of the referendum and protect jobs and security is by backing the deal that is on the table.” She said “no one else has an alternative plan” that delivers on the EU referendum result, protects jobs and provides certainty to businesses.

“There are some in Parliament who, despite voting in favour of holding the referendum, voting in favour of triggering Article 50 and standing on manifestos committed to delivering Brexit, now want to stop us leaving by holding another referendum,” she said. “Others across the House of Commons are so focused on their particular vision of Brexit that they risk making a perfect ideal the enemy of a good deal. “Both groups are motivated by what they think is best for the country, but both must realise the risks they are running with our democracy and the livelihoods of our constituents.”

Theresa May’s hopes of securing the legally binding changes needed to win support for her Brexit deal are fading, after EU sources said it was unlikely there would be a new European summit to approve them. An emergency council like the one held in November would be needed to sanction any changes that would have legal force. But diplomats have told The Independent that any concessions offered would be unlikely to require a meeting. It means any alterations or new language secured by the prime minister will probably not satisfy enough rebel Tories or her DUP partners in government to win the Commons vote expected in the coming weeks. Only this week the DUP warned the prime minister that unless Brussels gave significant ground on the hated Irish backstop it would not support her plans.

MPs return to Westminster next week and begin several days of debate on Ms May’s deal before it is put to a vote that most people expect the prime minister to lose. Downing Street has been trying to play down expectations that Ms May will secure a major change before the vote due on 15 or 16 January, but there had been talk that European officials are holding back one concession that they could make to the UK later in the year. But even for those changes to have legal force, a new summit would need to be called as currently there is only one scheduled for the end of March – far too late to do anything meaningful before the UK drops out of the EU on 29 March. European insiders told The Independent that the idea of a summit had been considered, but this was now looking less likely.

The Dark Overlord hacker group has released decryption keys for 650 documents it says are related to 9/11. Unless a ransom is paid, it threatened with more leaks that will have devastating consequences for the US ‘deep state’. The document dump is just a fraction of the 18,000 secret documents related to the September 11, 2001 terrorist attacks believed to have been stolen from insurers, law firms, and government agencies. The Dark Overlord initially threatened to release the 10GB of data unless the hacked firms paid an unspecified bitcoin ransom. However, on Wednesday, the group announced a “tiered compensation plan” in which the public could make bitcoin payments to unlock the troves of documents.

A day later, the Dark Overlord said that it had received more than $12,000 in bitcoin – enough to unlock “layer 1” and several “checkpoints,” comprised of 650 documents in total. There are four more layers that remain encrypted and, according to the group, “each layer contains more secrets, more damaging materials… and generally just more truth.” The hackers are asking for $2 million in bitcoin for the public release of its “megaleak,” which it has dubbed “the 9/11 Papers.” [..] By design, the “layer 1” documents – if authentic – do not appear to contain any explosive revelations. The publications focus mostly on testimonies from airport security and details concerning insurance pay-outs to parties affected by the 9/11 attacks. However, the data dump suggests that the group is not bluffing.

The Integrity Initiative, a UK-funded group exposed in leaked files as psyop network, played a key role in monitoring and molding media narratives after the poisoning of double agent Sergei Skripal, newly-dumped documents reveal. Created by the NATO-affiliated, UK-funded Institute for Statecraft in 2015, the Integrity Initiative was unmasked in November after hackers released documents detailing a web of politicians, journalists, military personnel, scientists and academics involved in purportedly fighting “Russian disinformation.” The secretive, government-bankrolled “network of networks” has found itself under scrutiny for smearing UK Labour leader Jeremy Corbyn as a Kremlin stooge – ostensibly as part of its noble crusade against anti-Russian disinformation.

Now, new leaks show that the organization played a central role in shaping media narratives after Sergei Skripal and his daughter Yulia were mysteriously poisoned in Salisbury last March. It’s notable that many of the draconian anti-Russia measures that the group advocated as far back as 2015 were swiftly implemented following the Skripal affair – even as London refused to back up its finger-pointing with evidence. Days after the Skripals were poisoned, the Institute solicited its services to the Foreign & Commonwealth Office, offering to “study social media activity in respect of the events that took place, how news spread, and evaluate how the incident is being perceived” in a number of countries. After receiving the government’s blessing, the Integrity Initiative (II) launched ‘Operation Iris,’ enlisting “global investigative solutions” firm Harod Associates to analyze social media activity related to Skripal.

Concerns over Chinese growth could spell problems for Africa and other parts of the developing world. Beijing funded an overseas investment boom in the past few decades as it strove to become the world’s second largest economic superpower, while also buying vast amounts of the natural resources produced by emerging nations. The scale of the expansion forms part of China’s multibillion-dollar “Belt and Road” Initiative, a state-backed campaign to promote its influence around the world, while providing stimulus for its own slowing economy. The transcontinental development project launched by China’s president, Xi Jinping, in 2013 aims to improve infrastructure links between Asia, Europe and Africa, with the aim for China to reap the benefits from increasing levels of global trade.

Mounting tensions between China and the US, however, have acted as a handbrake on rising levels of world trade. The IMF forecasts Chinese growth will slow to 6.2% this year from about 6.6% in 2018, due to escalations in the trade dispute that erupted last year. There are also rising fears over the rapid growth of debt in China used to fuel its expansion over the past decade. With Chinese investment in some African nations worth more than some of those states’ own domestic spending, analysts fear the prospect of weaker investment in future and fading demand for commodity exports. Figures from the United Nations’ development agency, Unctad, show that weakness in global commodity prices in 2014 and 2015 caused foreign direct investment flows into Africa to fall from $55bn in 2015 to $42bn in 2017, showing how Africa might be hit by a Chinese slowdown.

It’s Nancy Pelosi’s smile that gets me…oh, and not in a good way. It’s a smile that is actually the opposite of what a smile is supposed to do: signal good will and good faith. Nancy’s smile is full of malice and bad faith, like the smiles on representations of Shiva-the-Destroyer and Huitzilopochtli, the Aztec sun god who demanded thousands of human hearts to eat, lest he bring on the end of the world. It’s not exactly the end of the world in Washington D.C., but as the old saying goes: you can see it from there! It’s out on the edge of town like one of those sinister, broken-down circuses from the Ray Bradbury story-bag, with its ragtag cast of motheaten lions, crippled acrobats, a crooked wagon full of heartbroken freaks, and a shadowy ringmaster on a mission from the heart of darkness.

The new Democratic majority congress has convened in the spirit of a religious movement devoted to a single apocalyptic objective: toppling the Golden Golem of Greatness who rules in the House of White Privilege. They’re all revved up for inquisition, looking to apply as many thumbscrews, cattle prods, electrodes, waterboards, and bamboo splinters as necessary in pursuit of rectifying the heresy of the 2016 election. The simpleton California congressman Brad Sherman (D-30th dist.) couldn’t contain his glee, like a seven-year-old boy about to pull the wings off a fly. As soon as the Democratic majority was sworn in, he filed his articles of impeachment to impress his Wokester San Fernando Valley constituents out for deplorable blood.

That was even a bit too much for Madam Speaker who reminded Sherman that some scintilla of a predicate crime was required — but surely would be available when Special Counsel Robert Mueller hurls down his tablets of accusation from on high.

Jill Abramson, the former editor of the New York Times, said Fox News took her criticism of the newspaper’s Trump coverage in her upcoming book “totally out of context” for a story that appeared this week. The Fox News story, headlined “Former NY Times editor rips Trump coverage as biased,” quotes from Abramson’s book, “Merchants of Truth.” She wrote that although current Times executive editor Dean Baquet publicly said he didn’t want the newspaper to be the opposition party, “his news pages were unmistakably anti-Trump.” With an audience perceived to be mostly liberal, “there was an implicit financial reward for the Times in running lots of Trump stories, almost all of them negative,” she wrote in the book.

In a Saturday tweet, Trump commended Abramson as “100% correct” about the paper’s “[h]orrible and totally dishonest reporting on almost everything they write” and suggested it justified his calling the Times “fake news”. [..] Abramson was executive editor of the New York Times Co. flagship from 2011 to 2014 before being fired following a dispute with Baquet, then one of her deputies. She said in an email interview with the Associated Press that the Fox article’s author, “Media Buzz” host Howard Kurtz, had ignored compliments that she had for the Times and the Washington Post. “His article is an attempt to Foxify my book,” she wrote in the email, saying her book was “full of praise” for the New York Times and the Washington Post “and their coverage of Trump.”

Kurtz said in a phone interview with the AP that he was “sorry to see Jill back away from her own words” and that his report was accurate. “I would have written this story the same way if I were working for any news organization,” said Kurtz, a former Washington Post media columnist. “Her sometimes harsh criticism of her former paper’s Trump coverage leaps off the page and is clearly the most newsworthy element in the book because of her standing as a former executive editor.” [..] Abramson wrote that the more anti-Trump the Times was perceived to be, the more it was mistrusted for being biased. The late publisher Adolph Ochs’s promise to cover the news without fear or favor “sounded like an impossible promise in such a polarized environment, where the very definition of ‘fact’ and ‘truth’ was under constant assault,” she wrote in the book.

The narrative of Russian intelligence attacking state and local election boards and threatening the integrity of U.S. elections has achieved near-universal acceptance by media and political elites. And now it has been accepted by the Trump administration’s intelligence chief, Dan Coats, as well. But the real story behind that narrative, recounted here for the first time, reveals that the Department of Homeland Security (DHS) created and nurtured an account that was grossly and deliberately deceptive. DHS compiled an intelligence report suggesting hackers linked to the Russian government could have targeted voter-related websites in many states and then leaked a sensational story of Russian attacks on those sites without the qualifications that would have revealed a different story.

When state election officials began asking questions, they discovered that the DHS claims were false and, in at least one case, laughable. The National Security Agency and special counsel Robert Mueller’s investigating team have also claimed evidence that Russian military intelligence was behind election infrastructure hacking, but on closer examination, those claims turn out to be speculative and misleading as well. Mueller’s indictment of 12 GRU military intelligence officers does not cite any violations of U.S. election laws though it claims Russia interfered with the 2016 election.

In Sydney, breeding ground for one of the world’s biggest housing bubbles, prices of single-family houses dropped 7.3% in August, compared to a year earlier. Prices of “units” — condos in US lingo — fell 2.2% year-over-year. Price declines were the sharpest at the high end, with prices down 8.1% in the most expensive quarter of home sales. Prices of all types of homes combined fell 5.6%, according to CoreLogic’s Daily Home Value Index. The index is down 5.8% from its peak last September:

Melbourne, where the inflection point has been lagging a few months behind Sydney’s, is in the process of catching up. Over the three month-period, June-August, prices fell 2.0%, making Melbourne the weakest housing market among the capital cities. By segment, house prices fell 2.7% from a year ago while condo prices still inched up 1.5%. At the most expensive quarter of sales, prices fell 5.2% from a year ago. For all types of dwellings combined, prices declined 1.7% year-over-year, to the lowest level since early June 2017, according to CoreLogic. Prices are down 3.6% from their peak at the end of November 2017:

[..] With impeccable timing, there is a flood of new condos expected to be completed over the next two years, something avid crane-counters in Sydney and Melbourne have been swearing for a while. Here are some of these astounding numbers that CoreLogic estimates based on data it collected from the industry: Greater Sydney: In 2019: 31,500 new condos are scheduled to be completed. In 2020, another 45,500 condos are expected to be completed. This brings the two-year total of new condos to 77,000 units, which will increase the total stock of condos by 9.3%! Greater Melbourne: The oncoming flood of new condos is expected to reach 29,000 units in 2019 and nearly 50,000 units in 2020. Over the two years, this will increase the total stock of condos by nearly 79,000 units, or by 11.5%!

Even property investors have been priced out of the market. There are “currently no suburbs” in Sydney, Melbourne or Canberra where an investor can buy a detached house and expect it to be cashflow positive with a deposit of 20 per cent or less, according to an analysis by Propertyology. Releasing a list of the country’s “best capital city cash cow suburbs”, the research firm said buyers would have to travel to the Central Coast, 100km from the Sydney CBD, before finding an investment property with decent cashflow. Even then, a median-priced $490,000 house in Lake Munmorah — the least worst “Sydney” suburb identified in Propertyology’s list — will leave the investor $3093 out of pocket.

“Victoria paints a similar picture, with greater Melbourne’s best locations for cash flow investors within the municipality of Melton — 40km northwest of the CBD,” Propertyology head of research Simon Pressley said in a statement. It comes as CoreLogic figures showed national dwelling values fell for the 11th consecutive month in August, led by weakness in the two major capitals that comprise about 60 per cent of Australia’s housing market by value. Negatively geared properties — when the rental return is less than the interest payments and other costs — are “okay when you’re getting 10 per cent capital growth year in, year out”, said AMP Capital chief economist Dr Shane Oliver.

But investors now face falling house prices, rising interest rates, tighter lending conditions and the possibility of a future Labor government cracking down on negative gearing and capital gains tax breaks. “The equation gets more complicated,” Dr Oliver said.

Europe’s biggest news agencies accused Google and Facebook of “plundering” news for free on Tuesday in a joint statement that called on the internet giants to share more of their revenues with the media. In a column signed by the CEOs of around 20 agencies including France’s Agence France-Presse, Britain’s Press Association and Germany’s Deutsche Presse-Agentur they called on the European Parliament to update copyright law in the EU to help address a “grotesque imbalance”. “The internet giants’ plundering of the news media’s content and of their advertising revenue poses a threat both to consumers and to democracy,” the column said.

European Parliament lawmakers are to set to debate a new copyright law this month that would force the internet giants to pay more for creative content used on their platforms such as news, music or movies. A first draft of the law was rejected in July and the plans have been firmly opposed by US tech firms, as well as advocates of internet freedom who fear that the regulations could lead to higher costs for consumers. “Can the titans of the internet compensate the media without asking people to pay for access to the internet, as they claim they would be forced to? The answer is clearly ‘yes’,” the column said. The joint statement from the agencies, which are major suppliers of news, photos and video, said Facebook reported revenues of $40 billion (34 billion euros) in 2017 and profits of $16 billion, while Google made $12.7 billion on sales of $110 billion.

Markets have a very short attention span. Like babies, they move on quickly from one toy, or in this case an event, to another. For instance, markets seem to have moved on from the formation of the “Fragile Five,” a group of countries that suffered heavily when the U.S. Federal Reserve started to roll back its bond-buying program in 2013. Made up of Brazil, India, Indonesia, Turkey and South Africa, this group was marked by heavy currency depreciation, high current account deficits and political instability at home. The slump in commodity prices and fears of a Chinese slowdown kept the pressure on these economies. However, they have started to see a comeback; in India and Indonesia, for example, a change in government has led to political and economic reforms.

Investors started crowding this space and inflows into funds with exposure to these markets increased. But markets are feeling a sense of deja vu. Blame it on a stronger dollar, escalating tensions since President Donald Trump came to power, worries over a full-fledged trade war with China or rising interest rates in the U.S., this time around the crisis seems to have entered a new phase. The damage is far more widespread. The crisis has engulfed countries across the globe — from economies in South America, to Turkey, South Africa and some of the bigger economies in Asia, such as India and China. A number of these countries are seeing their currency fall to record levels, high inflation and unemployment, and in some cases, escalating tensions with the United States.

Investors brought up in the developed world take for granted the stability and continuation of the rule of law. They expect it to be as available and constant as air. Anyway, what role can a consideration of the rule of law play in trying to obtain index beating quarterly returns? It is this myopia and not the myopia associated with the short-term dumping of assets, because they are labelled ‘emerging markets’, that is particularly dangerous. The history of emerging markets is the history of populism, the real populism that subverts human rights and property rights. On the rise in emerging markets, this populism is resulting in a growing exodus of what are now very large sums, even in global terms, of local savings.

It is the shift in local savings, more so than foreign savings, that is pushing emerging market exchange rates to ever lower levels. It is not the flighty financial capital seeking slightly better interest rate differentials that departs in situations like this. It is the financial capital that funds development and growth that flees, as the rise of the rule of man begins to squeeze out the rule of law. The loss of such capital has profound long-term economic impacts. There is a key reason why the strong men are on the rise and the rule of law on the decline: the world is failing to inflate away its debts. Even before we invented paper money, there was a well recognized method of inflating away debts.

Perhaps most famously Henry VIII’s so-called great debasement (1544-1551) inflated away the excessive debts run up to fund wars with France and Scotland, as well as a bit of lavish spending by the king himself. Your analyst meets investors almost every day who believe that inflation is currently playing a similar role. However, such an assertion ignores the fact that the global non-financial debt to GDP ratio is now 244% up from what seemed a dangerous level of 210% of GDP as the global economy peaked in December 2007.

The Leave campaign in 2016 had a lot in common with the 1979 Conservative election manifesto. Both evoked the threat of a bureaucratic super-state and something approaching a conspiracy of that state against the public. Both promised to rescue a Greater Britain from the conspiratorial political forces that were holding it back. Both campaigns were a misdiagnosis of the real crisis at hand. This time we face a crisis of ungovernability potentially far more severe than that of the 1970s; but its roots are less in Europe than in the failures of the homegrown neoliberal reforms of the British state.

The last three decades of state reform in Western democracies have aggravated rather than resolved the social divisions that emerged with de-industrialisation. Over the last thirty years, liberal market economies in general and the UK in particular have transformed the character of their states through privatization and outsourcing, through the development of quasi markets in welfare, and the rejection of industrial policies. At the same time, permissive tax and regulatory regimes have encouraged large corporations to opt out of their former social obligations in the name of maximising shareholder value.

The ‘supply-side revolution’ of the last thirty years was driven by the dominant New Right diagnosis of the economic crises of the 1970s and based on the radical public choice economics aligned with the Chicago and Virginia schools. According to this diagnosis it was the state that was primarily responsible for the end of the post-war ‘golden age of growth’ because of its inhibition of the market. Thus, according to the New Right and later New Labour too, it wasn’t technological change, or de-industrialisation in the face of emerging markets, it wasn’t the Nixon shock, or the end of Bretton Woods, nor rising exchange rate instability, it wasn’t stagflation or the oil crises that had confronted the country with a need to re-evaluate its production regime. It was the state. And so it was the state, above all else, that had to be transformed.

China is helping Africa achieve development, not accumulate debt, a top Chinese official said on Tuesday, as the government pushes back against criticism it is loading the continent with an unsustainable burden during a major summit in Beijing. Chinese President Xi Jinping on Monday pledged funds of $60 billion to African nations at the opening of the Forum for China-Africa Cooperation, matching the size of the financing package offered at the last summit in Johannesburg in 2015. A wave of African nations seeking to restructure their debt with China has served as a reality check for Beijing’s relationship with the continent, though most countries still see Chinese lending as the best bet to develop their economies.

“If we take a closer look at these African countries that are heavily in debt, China is not their main creditor,” China’s special envoy for Africa, Xu Jinghu, told a news conference. “It’s senseless and baseless to shift the blame onto China for debt problems.” China would carefully choose projects that avoid causing debt problems when pushing forward with Xi’s pledges to Africa, she added. “When we cooperate with African countries we will conscientiously and fully carry out feasibility studies, to choose which projects can go ahead. These projects will take into account their development prospects so as to help African countries achieve sustainable development and avoid debt or financial problems.”

Energy: The shale oil “miracle” was a stunt enabled by supernaturally low interest rates, i.e. Federal Reserve policy. Even The New York Times said so yesterday (The Next Financial Crisis Lurks Underground). For all that, the shale oil producers still couldn’t make money at it. If interest rates go up, the industry will choke on the debt it has already accumulated and lose access to new loans. If the Fed reverses its current course — say, to rescue the stock and bond markets — then the shale oil industry has perhaps three more years before it collapses on a geological basis, maybe less. After that, we’re out of tricks. It will affect everything. The perceived solution is to run all our stuff on electricity, with the electricity produced by other means than fossil fuels, so-called alt energy.

This will only happen on the most limited basis and perhaps not at all. (And it is apart from the question of the decrepit electric grid itself.) What’s required is a political conversation about how we inhabit the landscape, how we do business, and what kind of business we do. The prospect of dismantling suburbia — or at least moving out of it — is evidently unthinkable. But it’s going to happen whether we make plans and policies, or we’re dragged kicking and screaming away from it. Corporate tyranny: The nation is groaning under despotic corporate rule. The fragility of these operations is moving toward criticality. As with shale oil, they depend largely on dishonest financial legerdemain. They are also threatened by the crack-up of globalism, and its 12,000-mile supply lines, now well underway. Get ready for business at a much smaller scale.

Hard as this sounds, it presents great opportunities for making Americans useful again, that is, giving them something to do, a meaningful place in society, and livelihoods. The implosion of national chain retail is already underway. Amazon is not the answer, because each Amazon sales item requires a separate truck trip to its destination, and that just doesn’t square with our energy predicament. We’ve got to rebuild main street economies and the layers of local and regional distribution that support them. That’s where many jobs and careers are.

An appellate court on Monday lifted a court-ordered suspension of licenses in Brazil for products containing glyphosate, an industrial weedkiller in common use in Latin America’s agricultural powerhouse. Federal appeals court judge Kassio Marques ruled that “nothing justified” the suspension by a lower court, saying it had been abruptly imposed “without previous analysis of the grave impact it would have on the country’s economy and on production in general.” The suspension, which had been ordered August 3 by a federal judge in Brasilia, was supposed to go into effect on Monday until a “toxicological re-evaluation” of all products containing glyphosate could be completed by Brazil’s sanitary authority.

The ban also was to have extended to products containing the chemicals thiram and abamectin. Glyphosate is used in weedkillers like Roundup, made by Monsanto, whose parent company Bayer had urged that the ban be scrapped. Bayer hailed the suspension as “very good news for Brazilian farmers.” It comes just weeks after a jury in California ordered Monsanto to pay $289 million to a dying former school groundskeeper for failing to warn him of the risk that Roundup might cause cancer.

I’ve been saying for a long time that the BRI (Belt and Road) is China’s attempt at exporting its overcapacity. They make poor countries borrow billions, which these can’t pay back. And then… Only now do other parties wake up to that. And Xi is trying to do some damage control.

China’s massive and expanding “Belt and Road” trade infrastructure project is running into speed bumps as some countries begin to grumble about being buried under Chinese debt. First announced in 2013 by President Xi Jinping, the initiative also known as the “new Silk Road” envisions the construction of railways, roads and ports across the globe, with Beijing providing billions of dollars in loans to many countries. Five years on, Xi has found himself defending his treasured idea as concerns grow that China is setting up debt traps in countries which may lack the means to pay back the Asian giant. “It is not a China club,” Xi said in a speech on Monday to mark the project’s anniversary, describing Belt and Road as an “open and inclusive” project.

Xi said China’s trade with Belt and Road countries had exceeded $5 trillion, with outward direct investment surpassing $60 billion. But some are starting to wonder if it is worth the cost. During a visit to Beijing in August, Malaysia’s Prime Minister Mahathir Mohamad said his country would shelve three China-backed projects, including a $20 billion railway. The party of Pakistan’s new prime minister, Imran Khan, has vowed more transparency amid fears about the country’s ability to repay Chinese loans related to the multi-billion-dollar China-Pakistan Economic Corridor. Meanwhile the exiled leader of the opposition in the Maldives, Mohamed Nasheed, has said China’s actions in the Indian Ocean archipelago amounted to a “land grab” and “colonialism”, with 80 percent of its debt held by Beijing.

Sri Lanka has already paid a heavy price for being highly indebted to China. Last year, the island nation had to grant a 99-year lease on a strategic port to Beijing over its inability to repay loans for the $1.4-billion project.

African countries have shown a healthy appetite for Chinese loans but some experts now worry that the continent is gorging on debt, and could soon choke. The Entebbe-Kampala Expressway is still something of a tourist attraction for Ugandans, nearly three months after it opened. The 51km (31 mile), four-lane highway that connects the country’s capital to the Entebbe International Airport was built by a Chinese company using a $476m (£366m) loan from the China Exim Bank. It has cut what was a torturous two-hour journey through some of Africa’s worst traffic into a scenic 45-minute drive into the East Africa nation’s capital. Uganda has taken $3bn of Chinese loans as part of a wider trend that Kampala-based economist Ramathan Ggoobi calls its “unrivalled willingness to avail unconditional capital to Africa”.

“This debt acquired from China comes with huge business for Chinese companies, particularly construction companies that have turned the whole of Africa into a construction site for rails, roads, electricity dams, stadia, commercial buildings and so on,” the Makerere University Business School lecturer told the BBC. The Chinese loans come as many African countries are once again in danger of defaulting on their debts more than a decade after many had their outstanding borrowing written off. At least 40% of low-income countries in the region are either in debt distress or at high risk, the International Monetary Fund warned in April.

Chad, Eritrea, Mozambique, Congo Republic, South Sudan and Zimbabwe were considered to be in debt distress at the end of 2017 while Zambia and Ethiopia were downgraded to “high risk of debt distress”. “In 2017 alone, the newly signed value of Chinese contracted projects in Africa registered $76.5bn,” Standard Bank’s China Economist Jeremy Stevens wrote in a note. “However, despite a sizeable remaining infrastructure deficit on the continent, there is a concern that African countries’ debt-service ability will soon dissolve,” he says.

Xi said at a business forum before the start of a triennial China Africa summit their friendship was time-honoured and that China’s investment in Africa came with no political strings attached. “China does not interfere in Africa’s internal affairs and does not impose its own will on Africa. What we value is the sharing of development experience and the support we can offer to Africa’s national rejuvenation and prosperity,” Xi said. “China’s cooperation with Africa is clearly targeted at the major bottlenecks to development. Resources for our cooperation are not to be spent on any vanity projects but in places where they count the most,” he said.

China has denied engaging in “debt trap” diplomacy but Xi is likely to use the gathering of African leaders to offer a new round of financing, following a pledge of $60 billion at the previous summit in South Africa three years ago. Chinese officials have vowed to be more cautious to ensure projects are sustainable. China defends continued lending to Africa on the grounds that the continent still needs debt-funded infrastructure development. Beijing has also fended off criticism it is only interested in resource extraction to feed its own booming economy, that the projects it funds have poor environmental safeguards, and that too many of the workers for them are flown in from China rather than using African labour.

A partner at Foley & Lardner, Ms. Mitchell was astonished to find herself dragged into the Russia investigation on March 13 when Democrats on the House Intelligence Committee issued an interim report. They wrote that they still wanted to interview “key witnesses,” including Ms. Mitchell, who they claimed was “involved in or may have knowledge of third-party political outreach from the Kremlin to the Trump campaign, including persons linked to the National Rifle Association (NRA).” Two days later the McClatchy news service published a story with the headline “NRA lawyer expressed concerns about group’s Russia ties, investigators told.” The story cited two anonymous sources claiming Congress was investigating Ms. Mitchell’s worries that the NRA had been “channeling Russia funds into the 2016 elections to help Donald Trump.”

Ms. Mitchell says none of this is true. She hadn’t done legal work for the NRA in at least a decade, had zero contact with it in 2016, and had spoken to no one about its actions. She says she told this to McClatchy, which published the story anyway. Now we’re learning how this misinformation got around, and the evidence points to Glenn Simpson of Fusion GPS, the outfit that financed the infamous Steele dossier. New documents provided to Congress show that Mr. Simpson, a Fusion co-founder, was feeding information to Justice Department official Bruce Ohr. In an interview with House investigators this week, Mr. Ohr confirmed he had known Mr. Simpson for some time, and passed at least some of his information along to the FBI.

In handwritten notes dated Dec. 10, 2016 that the Department of Justice provided to Congress and were transcribed for us by a source, Mr. Ohr discusses allegations that Mr. Simpson made to him in a conversation. The notes read: “A Russian senator (& mobster) . . . [our ellipsis] may have been involved in funneling Russian money to the NRA to use in the campaign. An NRA lawyer named Cleta Mitchell found out about the money pipeline and was very upset, but the election was over.”

The short-term impact of a no-deal Brexit on Britain’s economy would be “chaotic and severe”, jeopardising jobs and disrupting trade links, warn experts from the thinktank UK in a Changing Europe. The Brexit secretary, Dominic Raab, has said he believes 80% of the work on completing an exit deal with the EU27 is already done, as negotiations enter their final phase. But his cabinet colleague Liam Fox recently suggested a no-deal scenario – which would occur if negotiations broke down, or both sides agreed to disagree – was the most likely outcome. In a 30-page updated assessment of the impact of no deal, the thinktank said on Monday it would mean “the disappearance without replacement of many of the rules underpinning the UK’s economic and regulatory structure”.

Its analysis claimed that in the short term: • Food supplies could be temporarily disrupted – the beef trade could collapse, for example, as Britain is heavily reliant on EU imports, and would be forced to apply tariffs, in accordance with World Trade Organisation (WTO) rules. • European health insurance cards, which allow British tourists free healthcare in the EU, would be invalid from Brexit day. • There would almost certainly have to be a “hardening of the border” between Northern Ireland and the Irish Republic, including some “physical manifestation”. • The status of legal contracts and commercial arrangements with EU companies would be unclear, as the UK would become a “third country” overnight. • Increased and uncertain processing times for goods at the border would be “nearly certain”, risking queues at Dover and forcing firms to rethink their supply chains.

In the longer term, UK in a Changing Europe’s experts say, the UK would have time to normalise its trading status, and agreements could be struck with the EU27 to tackle many other practical challenges. “It should not be assumed that the damage, while real, will necessarily be long-lasting,” the report says.

Boris Johnson has used his first newspaper column of the new parliamentary term to attack Theresa May’s Chequers plan, saying it means the UK enters Brexit negotiations with a “white flag fluttering”. The declaration amounts to a significant escalation the former foreign secretary’s guerrilla campaign against the prime minister and her Chequers plan a day before the Commons returns and at a time when party disquiet over the direction of the divorce talks is mounting. Johnson wrote that “the reality is that in this negotiation the EU has so far taken every important trick. The UK has agreed to hand over £40 billion of taxpayers’ money for two thirds of diddly squat”.

Johnson added that by adopting the Chequers plan, which will see the UK adopt a common rule book for food and goods, “we have gone into battle with the white flag fluttering over our leading tank”. It will be “impossible for the UK to be more competitive, to innovate, to deviate, to initiate, and we are ruling out major free trade deals,” he added. The intervention comes after a summer in which the former minister, who resigned over the Chequers deal, had avoided touching on Brexit in his Daily Telegraph column – although he did unleash a storm of complaint by describing fully veiled Muslim women as looking like letter boxes and bank robbers. It will be seen as preparing the ground for a leadership challenge to May just as the Brexit negotiations reach their critical phase in the autumn, which is to culminate in any final deal agreed by the UK government being put to parliament for a vote.

The number of officials who have left the Whitehall department trying to deliver Brexit is equivalent to more than half of its total staff, shock new figures reveal. Data seen by The Independent shows hundreds of civil servants went elsewhere as the department tried to get on its feet and cobble together a negotiating stance for the UK over the last two years. The exodus means the average age of workers left in the department is 32, though they are tasked with winning a complex deal that could change Britain for a generation.

The information obtained by the Liberal Democrats appears to corroborate previous reports about an extraordinarily high turnover at the Department for Exiting the European Union (Dexeu), with critics now claiming it points to “deep instability” at the heart of the government’s Brexit operation. According to the turnover data obtained under freedom of information, a staggering 357 staff have left the Dexeu in just two years. Yet the total number of those employed at the Whitehall department amounts to only 665, indicating a turnover rate of more than 50 per cent in that period.

Britain’s leading role in evaluating new medicines for sale to patients across the EU has collapsed with no more work coming from Europe because of Brexit, it has emerged. The decision by the European Medicines Agency to cut Britain out of its contracts seven months ahead of Brexit is a devastating blow to British pharmaceutical companies already reeling from the loss of the EMA’s HQ in London and with it 900 jobs. All drugs sold in Europe have to go through a lengthy EMA authorisation process before use by health services, and the Medicines & Healthcare products Regulatory Agency (MHRA) in Britain has built up a leading role in this work, with 20-30% of all assessments in the EU.

The MHRA won just two contracts this year and the EMA said that that work was now off limits. “We couldn’t even allocate the work now for new drugs because the expert has to be available throughout the evaluation period and sometimes that can take a year,” said a spokeswoman. In a devastating second blow, existing contracts with the MHRA are also being reallocated to bloc members. Martin McKee, the professor of European health at the London School of Hygiene and Tropical Medicine, who has given evidence to select committees about Brexit, said it was a disaster for the MHRA, which had about £14m a year from the EMA. The head of the Association of British Pharmaceutical Industry said it was akin to watching a “British success story” being broken up.

Almost exactly six years ago, the Spanish government requested a €100 billion bailout from the Troika (ECB, European Commission and IMF) to rescue its bankrupt savings banks, which were then merged with much larger commercial banks. Over €40 billion of the credit line was used; much of it is still unpaid. Yet Spain’s banking system could soon face a brand new crisis, this time not involving small or mid-sized savings banks but instead its alpha lenders, which are heavily exposed to emerging economies, from Argentina to Turkey and beyond. In the case of Turkey’s financial system, Spanish banks had total exposure of $82.3 billion in the first quarter of 2018, according to the Bank for International Settlements.

That’s more than the combined exposure of lenders from the next three most exposed economies, France, the USA, and the UK, which reached $75 billion in the same period. According to BIS statistics, Spanish banks’ exposure to Turkey’s economy almost quadrupled between 2015 and 2018, largely on the back of Spain’s second largest bank BBVA’s madcap purchase of roughly half of Turkey’s third largest lender, Turkiye Garanti Bankasi. Since buying its first chunk of the bank from the Turkish group Dogus and General Electric in 2010, BBVA has lost over 75% of its investment under the combined influence of Garanti’s plummeting shares and Turkey’s plunging currency.

But the biggest fear, as expressed by the ECB on August 10, is that Turkish borrowers might not be hedged against the lira’s weakness and begin to default en masse on foreign currency loans, which account for a staggering 40% of the Turkish banking sector’s assets. If that happens, the banks most exposed to Turkish debt will be hit pretty hard. And no bank is as exposed as BBVA, though the lender insists its investments are well-hedged and its Turkish business is siloed from the rest of the company. In Argentina, whose currency continues to collapse and whose economy is now spiraling down despite an IMF bailout, Spanish banks’ total combined investments amounted to $28 billion in the first quarter of 2018. That represented almost exactly half of the $58.9 billion that foreign banks are on the hook for in the country. The next most at-risk banking sector, the US, has some $10 billion invested.

Real wage growth has been nonexistent in the United States for more than 30 years. But as America enters the 10th year of the recovery—and the longest bull market in modern history—there are nervous murmurs, even among capitalism’s most reliable defenders, that some of its most basic mechanisms might be broken. The gains of the recovery have accrued absurdly, extravagantly to a tiny sliver of the world’s superrich. A small portion of that has trickled down to the professional classes—the lawyers and money managers, art buyers and decorators, consultants and “starchitects”—who work for them. For the declining middle and the growing bottom: nothing.

This is not how the economists told us it was supposed to work. Productivity is at record highs; profits are good; the unemployment rate is nearing a meager 4 percent. There are widely reported labor shortages in key industries. Recent tax cuts infused even more cash into corporate coffers. Individually and collectively, these factors are supposed to exert upward pressure on wages. It should be a workers’ market. But wages remain flat, and companies have used their latest bounty for stock buybacks, a transparent form of market manipulation that was illegal until the Reagan-era SEC began to chip away at the edifice of New Deal market reforms.

The power of labor continues to wane; the Supreme Court’s Janus v. AFSCME decision, while ostensibly limited to public sector unions, signaled in certain terms the willingness of the court’s conservative majority—five guys who have never held a real job—to effectively overturn the entire National Labor Relations Act if given the opportunity. The justices, who imagine working at Wendy’s is like getting hired as an associate at Hogan & Hartson after a couple of federal clerkships, reason that every employee can simply negotiate for the best possible deal with every employer.

An inevitable story. And a too-easy trap: the Guardian presumes that it itself escapes this. It doesn’t. Blaming Trump for that is false: he doesn’t write the stories. Every news outlet is responsible for its own journalistic standards. “Trump made me do it” lacks all credibility. And besides, the Guardian, like so many US media, has been trying to put Trump down for a long time. Just like it hammered Jeremy Corbyn as ‘unfit’ and much worse until it did an embarrassing 180. Is Trump right in reacting as agressively as he has and does? Perhaps not, probably not. But is he justified? Perhaps he is. In the end for the media this is about the beam in thine own eye.

You can find exactly the same fractured dialogue in Britain, too. What did the surprise of the Brexit vote show? Here’s another tidal wave of articles talking about the non-metropolitan forgotten masses. That, briefly, seemed a national call for understanding and change, one inchoately confirmed in the June election. But see how deafness and disdain soon set in. Let’s blame something – Boris, Rupert Murdoch, Paul Dacre, the BBC – for Brexit. Let’s contemplate the rise of Jeremy Corbyn and press a panic button. The Mail talks about “fake news, the fascist left and the REAL purveyors of hate”. Guardian columnists denounce the “open sewer” of Dacre coverage. Terms like “Tory scum” float from protesters’ posters into the new mass media. Jon Snow, amongst others, gets pasted for his supposed views about modern Conservatism. Irate Leave MPs stomp on the BBC welcome mat.

And every new day seems to bring fresh ingredients. Kensington council seeks to shut journalists out of its crucial meeting. Andrea Leadsom extols a “patriotic” press. There’s a raw edge to the debate now, sharpened after Grenfell Tower by outbreaks of pure and, sometimes, simulated rage. But: “Sit up, though, and look around. You may notice that, amid almost no public outrage whatsoever, we are quite a lot closer than once we were” to losing press freedom, says Hugo Rifkind in the Times. This is politics, and journalism, from the trenches as trust in the media plummets both here and in the US: American trust in the media down to just 38% in the latest Reuters Institute findings, the UK seven points down to 43%. Blame “deep-rooted political polarisation and perceived mainstream media bias”, says Reuters. In short, blame the frenzied state we’re in.

[..] observe how the new nihilism of scum and sewers brings its own narrow benefits. Richard Cohen in the Washington Post arrives clear-eyed. “Circulation is up. Eyeballs are popping. Trump is political pornography – gripping, exciting, lewd, fascinating. He devours adjectives so that, soon, we run out of them. The bizarre becomes ordinary. But he has done his damage. He has normalised contempt for the news media, framing it as a daily tussle between him, the tribune of the people, and us, vile overeducated snobs.”

And Jeet Heer of the New Republic pushes the argument on a notch as he charts the advantage of Trump’s alignment with the likes of the National Enquirer: “The tabloids offer a sordid vision of society, where the mainstream image of celebrities elides their secretly miserable lives (whether because of addiction, ageing, infidelity, or bankruptcy). In this nihilistic world, everyone is corrupt and every public statement is a lie. And if everyone is equally bad and untrustworthy, there’s no reason to hold Trump to any higher standard. This, ultimately, is why Trump and the tabloids were made for each other: They’re both committed to defining deviancy down.”

And while we’re at it, Guardian, let’s denounce this kind of thing for what it is. The G20 countries are responsible for poverty in Africa, and they’re not now going to solve it too. Just like the Paris agreement is complete nonsense: schemes to get rich.

G20 nations launched an unprecedented initiative Saturday at the group’s summit in Germany to fight poverty in Africa, but critics called the plan half-hearted. Under German Chancellor Angela Merkel’s “Investment Compacts”, an initial seven African countries would pledge reforms and receive technical support in order to attract new private investment. More than half of Africans are under 25 years old and the population is set to double by mid-century, making economic growth and jobs essential for the young to stop them from leaving, Merkel has said. Germany’s partner nations are Ghana, Ivory Coast and Tunisia, while Ethiopia, Morocco, Rwanda and Senegal are also taking part. Far poorer nations such as Niger or Somalia are so far not on the list.

“We are ready to help interested African countries and call on other partners to join the initiative,” said the G20 in their final communique. The plan, as well as multinational initiatives on helping girls, rural youths and promoting renewable energy, would help “to address poverty and inequality as root causes of migration”. Some 100,000 people, most of them sub-Saharan Africans, have made the dangerous journey to Europe across the Mediterranean in rickety boats this year as the migration crisis shows no sign of abating. Anti-poverty group ONE said that the investment compacts “promised much, but too many G20 partners missed the memo and failed to contribute. “The flimsy foundations must now be firmed up, follow through and improved, especially for Africa’s more fragile states.”

If your enemy is waging economic war on you, it’s prudent to camouflage how well your farms and factories are doing. Better the attacker thinks you’re on your last legs, and are too exhausted to fight back. A new report on the Russian economy, published by Jon Hellevig, reveals the folly in the enemy’s calculation. Who is the audience for this message? US and NATO warfighters against Russia can summon up more will if they think Russia is in retreat than if they must calculate the cost in their own blood and treasure if the Russians strike back. That’s Russian policy on the Syrian front, where professional soldiers are in charge. On the home front, where the civilians call the shots, Hellevig’s message looks like an encouragement for fight-back – the economic policymaker’s equivalent of a no-fly zone for the US and European Union. It’s also a challenge to the Kremlin policy of appeasement.

Hellevig, a Finnish lawyer and investment analyst, has been directing businesses in Russia since 1992. His Moscow-based consultancy Awara has published its assessment of Russian economic performance since 2014 with the title, “What Does Not Kill You Makes You Stronger.” The maxim was first coined by the `19th century German philosopher Friedrich Nietzsche. He said it in a pep talk for himself. Subsequent readers think of the maxim as an irony. Knowing now what Nietzsche knew about his own prognosis but kept secret at the time, he did too. The headline findings aren’t news to the Kremlin. It has been regularly making the claims at President Vladimir Putin’s semi-annual national talk shows; at businessmen’s conventions like the St. Petersburg International Economic Forum (SPIEF); and in Kremlin-funded propaganda – lowbrow outlets like Russia Today and Sputnik News, and the highbrow Valdai Club.

A charter for a brand-new outlet for the claims, the Russian National Convention Bureau, was agreed at the St. Petersburg forum last month. Government promotion of reciprocal trade and inward investment isn’t exceptional for Russia; it is normal practice throughout the world. The argument of the Hellevig report is that the US and NATO campaign against Russia has failed to do the damage it was aimed to do, and that their propaganda outlets, media and think-tanks are lying to conceal the failure. Small percentage numbers for the decline in Russian GDP and related measures are summed up by Hellevig as “belt-tightening, not much more”. Logically and arithmetically, similarly small numbers in the measurement of the Russian recovery this year ought to mean “belt expanding, not much more.” But like Nietzsche, Hellevig is more optimistic.

Here’s what he concludes:
• “Industrial Production was down merely 0.6%. A handsome recovery is already on its way with an expected growth of 3 to 4% in 2017. In May the industrial production already soared by a promising 5.3%.”
• “Unemployment remained stable all through 2014 – 2016, the hoped-for effect of sanctions causing mass unemployment and social chaos failed to materialize.”
• “GDP was down 2.3% in 2014-2016, expected to more than make up for that in 2017 with 2-3% predicted growth.”
• “The really devastating news for ‘our Western partners’ (as Putin likes to refer to them) must be – which we are the first to report – the extraordinary decrease in the share of oil & gas revenue in Russia’s GDP.”
• “In the years of sanctions, Russia has grown to become an agricultural superpower with the world’s largest wheat exports. Already in the time of the Czars Russia was a big grain exporter, but that was often accompanied with domestic famine. Stalin financed Russia’s industrialization to a large extent by grain exports, but hereby also creating domestic shortages and famine. It is then the first time in Russia’s history when it is under Putin a major grain exporter while ensuring domestic abundance. Russia has made an overall remarkable turnaround in food production and is now virtually self-sufficient.”
• “Russia has the lowest level of imports (as a share of the GDP) of all major countries… Russia’s very low levels of imports in the global comparison obviously signifies that Russia produces domestically a much higher share of all that it consumes (and invests), this in turn means that the economy is superbly diversified contrary to the claims of the failed experts and policymakers. In fact, it is the most self-sufficient and diversified economy in the world.

Britain’s government isn’t due to announce a new budget until the autumn, but debate is already raging over public-sector pay. With Brexit bearing down, the embattled prime minister, Theresa May, will have to choose between making another embarrassing U-turn and defending a policy that is both unpopular and unnecessary. Sadly for May, the U-turn makes better sense. For years it was an article of faith among Britain’s Conservatives that the budget deficit had to be eliminated — by 2020, if not yesterday. Some Tories are now ready to abandon that line of thinking; others still hold the principle, if not the timetable, sacrosanct. Speaking in Parliament on Wednesday, May came down firmly on the side of austerity: Greece shows you where fiscal indiscipline leads, she argued.

Labour leader Jeremy Corbyn was unmoved. He decried the “low-wage epidemic” and argued that the 1 percent cap on increases in public-sector wages should be removed. Corbyn has a point. Britain’s workers are getting squeezed, especially in the public sector, thanks to rising inflation caused in part by the Brexit-induced fall in sterling. But he’s wrong to look at wages in isolation. Public-sector pay is only one of many claims on the government’s budget. The National Health Service, for instance, is in a state of permanent crisis; spending on care for the elderly and other needs is woefully inadequate. The list of other worthy expenditures is endless. Trying to meet all such claims would indeed be a formula for fiscal collapse. The government has to prioritize.

Where higher wages are needed to recruit and retain workers for essential services, raise them. Where additional public spending is needed to provide vital infrastructure, spur productivity, and support growth, make the investment. In such cases, higher taxes and/or higher public borrowing can be justified. If caps and ceilings are used in a way that makes this necessary flexibility impossible – not as emergency measures, moreover, but as a system of long-term control – they’ll do more harm than good. May’s embrace of blanket austerity, by the way, is bad politics as well as bad economics. Most British voters have forgotten, or never experienced, the ruinous consequences of profligate public spending.

That’s why Corbyn’s expansive promises are more popular than you might expect – and why there’ll be greater support for fiscal control if it’s seen to be smart and discriminating, rather than an act of blind ideological faith. To be sure, the timing for a change of fiscal strategy is hardly propitious. Brexit has alarmed investors, giving the government less room for maneuver. Even so, the government shouldn’t be paralyzed – and shouldn’t argue that cautious flexibility would make the country another Greece. That line won’t fly. Targeted spending to improve vital services and drive future growth is good policy, and Britain’s best buffer against the perils ahead.

Retirement is right around the corner for baby boomers – if they haven’t already entered it – yet so many are financially unprepared. Baby boomers, or those born between 1946 and 1964, expect they’ll need $658,000 in their defined contribution plans by the time they retire, but the average in those employer-sponsored plans is $263,000, according to a survey of 900 investors by financial services firm Legg Mason. Older boomers, who are 65 to 74, have an average of $300,000. Their asset allocation for all of their investments are also conservative, according to QS Investors, an investment management firm Legg Mason acquired in 2014, with 30% in cash, 24% in equities, 22% in fixed income, 4% in non-traditional assets, 8% in investment real estate, 2% in gold and other precious metals and 8% in other investments.

“They have less than half the assets they hope to have in retirement,” said James Norman, president of QS Investors. “That’s a pretty big miss.” Americans across the country, and all age groups, are drastically under-saved for retirement. Only a third of Americans who have access to a 401(k) plan contribute to it, and previous research suggests the typical middle-aged American couple only has $5,000 saved for the future. Meanwhile, millennials may not be able to picture themselves in retirement at all, though are urged by financial professionals to make a habit of saving, if even only as little as $5. There are a multitude of reasons people may not have enough for retirement, such as having to leave the workforce in between their prime years to care for loved ones, not working long enough to qualify for certain government benefits. or choosing to pay for their childrens’ college tuition instead of saving for their own retirement.

Still, not saving enough was the biggest regret among older Americans, according to a survey of 1,000 participants by personal finance site Bankrate.com. Generation X, or those born between 1965 and 1981, aren’t doing all that much better, though they have the benefit of more time to reach their financial goals. More of them have a defined contribution plan, according to the Legg Mason survey, with an average of $199,000 stashed away for a goal of $541,000 by retirement. They are also investing conservatively, with 25% in cash, 21% in equities, 17% in fixed income, 11% in non-traditional assets, 16% in investment real estate, 7% in gold and other precious metals and 4% in other investments. Conversely, QS Investors suggest their Gen-X aged clients have 80% in equities, which faces more risks from the stock market but could also realize higher returns.

Retirement isn’t the picture-perfect image of lounging on a beach with the idea of a 9-to-5 job long gone. Benefits aren’t the same, either – for example, in 1985, retirees could expect Social Security to cover most of their income and employers typically covered most health-care costs. Retirees 30 years ago also probably didn’t expect to live for decades after resigning at 65, whereas now people are being told to plan to live well into their 80s.

Buyers who purchased new properties direct from some of the UK’s biggest builders have been left in the dark as investment companies play pass-the-parcel with the land their homes stand on. Take Joanne Darbyshire, 46, and her husband Mark, 47. They bought a five-bedroom house in Bolton from Taylor Wimpey in 2010, and are among thousands of unfortunate leaseholders put on “doubling” ground rent contracts that in extreme cases have left their properties almost worthless, with mortgage lenders refusing loans to future buyers. The only way to escape the escalating payments is to buy the freehold. But in Darbyshire’s case, Taylor Wimpey sold it to Adriatic Land 2 (GR2) in 2012. In January 2017 that company transferred it to Adriatic Land 1 (GR3), while some of Darbyshire’s neighbours have seen their freeholds transferred from Adriatic Land 2 (GR2) to Abacus Land Ltd.

“You have no idea who owns the land under your feet,” says Darbyshire. “Your dream house is traded from one offshore company to another for tax reasons, or who knows what else?” Paul Griffin (not his real name) bought a property from Morris Homes in Winsford, Cheshire, in November 2014. By last year, when he decided to add a conservatory, his freehold was in the hands of Adriatic Land 3 and managed by its fee-collecting agents HomeGround. Young was horrified to discover he had to pay £108 just to look at his file. Although the conservatory didn’t need local authority planning permission and was not subject to building regulations, HomeGround then demanded £1,200 for a “licence” for the work to go ahead. This was broken down into solicitors fees (£480), surveyors (£360), and its own fee of £360.

On top of this it demanded numerous official documents at Young’s expense totalling about £400. Helen Burke (not her real name) in Ellesmere Port, meanwhile, was shocked to discover that after Bellway sold her freehold to Adriatic, the cost of seeking consent for a small single-storey extension rocketed. Initially, she had applied to Bellway – the freeholder at the time – and it wanted £300. But after putting off the work for a few months she discovered that Bellway had sold the freehold to Adriatic Land 4 (GR1) Ltd. HomeGround then demanded £2,440 for consent. That is not planning permission, which householders must obtain separately from the local authority. It is simply a fee charged without any material services provided.

“It’s daylight robbery,” says Burke. “The most disgusting thing is the developers like Bellway think they are doing nothing wrong selling the freeholds on and state that our T&Cs don’t change. Yes, the lease terms don’t change, but for a permission fee to increase from £300 to £2,440 in a matter of months is disgraceful and it should absolutely be pointed out to new homeowners, up front, that this might happen if they don’t buy the freeholds.” Burke said she was quoted £3,750 to buy the freehold off Bellway, but once it was sold to Adriatic the price quadrupled to £13,000. After a long legal battle she has acquired it for £7,680.

Easy Wall Street cash is leading U.S. shale companies to expand drilling, even as most lose money on every barrel of oil they bring to the surface. Despite a 17% plunge in prices since April, drillers are on pace to break the all-time U.S. oil production record, topping 10 million barrels a day by early next year if not sooner, according to government officials and analysts. U.S. crude fell again on Friday, dropping 2.8% to $44.23 a barrel on the New York Mercantile Exchange. Yet the U.S. oil rig count rose Friday to the highest level in more than two years. Operators have now put more than 100 rigs back to work from Oklahoma to North Dakota in the past three months. Companies have more capital to keep drilling thanks to $57 billion Wall Street has injected into the sector over the last 18 months.

Money has come from investors in new stock sales and high-yield debt, as well as from private equity funds, which have helped provide lifelines to stronger operators. Flush with cash, virtually all of them launched campaigns to boost drilling at the start of 2017 in the hope that oil prices would rebound. The new wave of crude has again glutted the market. The shale companies are edged even further from profitability, and a few voices have begun to question the wisdom of Wall Street financing the industry’s addiction to growth. “The biggest problem our industry faces today is you guys,” Al Walker, chief executive of Anadarko, told investors at a conference last month.

Wall Street has become an enabler that pushes companies to grow production at any cost, while punishing those that try to live within their means, Mr. Walker said, adding: “It’s kind of like going to AA. You know, we need a partner. We really need the investment community to show discipline.” Even if companies cut back on drilling now, it wouldn’t be enough to stop a new wave of oil from hitting the market in the second half of the year: U.S. shale output typically lags behind new drilling by four to six months, analysts say. “There’s been insufficient discrimination on the part of sources of capital,” said Bill Herbert, an energy analyst with Piper Jaffray’s Simmons. Big shale companies “are able to get what they want and invest what they want.”

One morning in late March, Brij Khandelwal called the Agra police to report an attempted murder. Days before, the high court in India’s Uttarakhand state had issued a landmark judgment declaring the Yamuna river – and another of India’s holiest waterways, the Ganges – “living entities”. Khandelwal, an activist, followed the logic. “Scientifically speaking, the Yamuna is ecologically dead,” he says. His police report named a series of government officials he wanted charged with attempted poisoning. “If the river is dead, someone has to be responsible for killing it.” In the 16th century, Babur, the first Mughal emperor, described the waters of the Yamuna as “better than nectar”. One of his successors built India’s most famous monument, the Taj Mahal, on its banks.

For the first 250 miles (400km) of its life, starting in the lower Himalayas, the river glistens blue and teems with life. And then it reaches Delhi. In India’s crowded capital, the entire Yamuna is siphoned off for human and industrial use, and replenished with toxic chemicals and sewage from more than 20 drains. Those who enter the water emerge caked in dark, glutinous sludge. For vast stretches only the most resilient bacteria survive. The waterway that has sustained civilisation in Delhi for at least 3,000 years – and the sole source of water for more than 60 million Indians today – has in the past decades become one of the dirtiest rivers on the planet.

“We have water records which show that, until the 1960s, the river was much better quality,” says Himanshu Thakkar, an engineer who coordinates the South Asia Network on Dams, Rivers and People, a network of rights groups. “There was much greater biodiversity. Fish were still being caught.” What happened next mirrors a larger Indian story, particularly since the country’s markets were unshackled in the early 1990s: one of runaway economic growth fuelled by vast, unchecked migration into cities; and the metastasising of polluting industries that have soiled many of India’s waterways and made its air the most toxic in the world.

[..] major Asian stock markets continued their downward slide, following a massive sell-off on Wall Street overnight, pressured by concerns over a global economic slowdown and low oil prices. After a late sell-off Wednesday afternoon, the Chinese markets opened in negative territory before trimming losses, with the Shanghai composite down some 1.05%, while the Shenzhen composite was flat. At market open, Shanghai was down 2.73% and Shenzhen saw losses of 3.37%. Hong Kong’s Hang Seng index was down 1.51%. Offering some sign of stability in a generally volatile market, the People’s Bank of China (PBOC) set Thursday’s yuan mid-point rate at 6.5616, compared with Wednesday’s fix of 6.5630. The dollar-yuan pair was nearly flat at 6.5777.

Japan’s Nikkei 225 erased all of Wednesday’s 2.88% gain and plunged 3.95%, weighed by commodities and machinery sectors, which were all down between 3 and 4%. Earlier, it fell as low as 4% before paring back some of the losses. South Korea’s Kospi traded down 1.45%. Down Under, the ASX 200 dropped 1.61%, with energy and financials sectors sharply down. All sectors were in the red except for gold, which saw an uptick of 3.71%. In Japan, core machinery orders in November fell 14.4% from the previous month, according to official data, down for the first time in three months. The data is regarded as an indicator of capital spending and fell more than market expectations for a 7.9% decline.

US stocks fell heavily on Wednesday, with the Standard & Poor’s 500 falling 2.5% to take the index below 1,900 points for the first time since September, due to growing concerns about the falling oil price, which dipped below $30 a barrel for the first time in nearly 12 years. The S&P 500, which closed at 1,890 points, suffered its worst day since September and has fallen by 10% since its November peak taking it into “correction” territory, something that has not happened since August 2014. The Dow Jones industrial average dropped by 364 points, or 2.2%, to 16,151, and the Nasdaq composite dropped 159 points, or 3.4%, to 4,526. This deepened the New York stock exchange’s already worst start to a year on record.

Wednesday’s stock market declines were triggered by new figures showing US gasoline stockpiles had increased to record high, which caused Brent crude prices to fall as low as $29.96, their lowest level since April 2004, before settling at $30.31, a 1.8% fall. The oil price has fallen by 73% since a peak of $115 reached in the summer of 2014. Industry data showed that US gasoline inventories soared by 8.4m barrels and stocks of diesel and heating oil increased by more than 6m barrels – confirming the forecasts of many analysts that a huge oversupply of oil could keep prices low during most of 2016. Analysts said that growing fears of a weakening outlook for the global economy, made worse by falling oil prices, was behind the steep falls. Some oil analysts this week predicted that the price could fall as low as $10.

In recent days several analysts have warned that the global economy could suffer a repeat of the 2008 crash if the knock-on effects of a contraction in Chinese output pushes down commodity prices further and sparks panic selling on stock and bond markets. [..] Earlier in the day China’s stock market fell more than 2% after officials played down the significance of better-than-expected trade figures for December, saying exports could sink further before they find a floor.

Chinese stocks headed for a bear market while government bond yields fell to a record as central bank cash injections and a stable yuan fixing failed to shore up confidence in the world’s second-largest economy. The Shanghai Composite Index sank as much as 2.8%, falling more than 20% from its December high and sinking below its closing low during the depths of a $5 trillion rout in August. Investors poured money into government bonds after the People’s Bank of China added the most cash through open-market operations since February 2015, sending the yield on 10-year notes down to 2.7%. While the central bank kept its yuan reference rate little changed for a fifth day, the currency dropped 0.5% in offshore trading and Hong Kong’s dollar declined to the weakest since March 2015.

The selloff is a setback for Chinese authorities, who have been intervening to support both stocks and the yuan after the worst start to a year for mainland markets in at least two decades. As policy makers in Beijing fight to prevent a vicious cycle of capital outflows and a weakening currency, the resulting financial-market volatility has undermined confidence in their ability to manage the deepest economic slowdown since 1990 “You can’t really find buyers in this environment,” said Ken Peng, a strategist at Citigroup Inc. in Hong Kong. “It’s a very, very fragile status quo China is trying to maintain.” The government faces a dilemma with the yuan, according to Samuel Chan at GF International.

On one hand, a weakening exchange rate would help boost exports and is arguably justified given declines in other emerging-market currencies against the dollar in recent months. The downside is that a depreciating yuan encourages capital outflows and makes it harder to keep domestic interest rates low. The monetary authority “doesn’t want the yuan to depreciate fast because it will push funds to leave China very quickly,” Chan said. The country saw capital outflows for 10 straight months through November, totaling $843 billion, according to an estimate from Bloomberg Intelligence. Foreign-exchange reserves, meanwhile, sank by a record $513 billion last year to $3.33 trillion, according to the central bank.

Couple of things: first of all, any discussion whether the US market is in a profit (or revenue) recession must stop: the US entered a profit recession in Q3 when it posted two consecutive quarters of earnings declines. This was one quarter after the top-line of the S&P dropped for two consecutive quarters, and as of this moment the US is poised to have 4 consecutive quarters with declining revenues as of the end of 2015. Furthermore, as we showed on September 21, when Q4 was still expected to be a far stronger quarter than it ended up being, in the very best case, the US would go for 7 whole quarters without absolute earnings growth (and even longer without top-line growth).

Then, as always happens, optimism about the current quarter was crushed as we entered the current quarter, and whereas on September 30, 2015, Q4 earnings growth was supposed to be just a fraction negative, or -0.6%, as we have crossed the quarter, the full abyss has revealed itself and according to the latest Factset consensus data as of January 8, the current Q4 EPS drop is now expected to be a whopping -5%. And just to shut up the “it’s all energy” crowd, of the 10 industries in the S&P, only 4 are now expected to post earnings growth and even their growth is rapidly sliding and could well go negative over the next few weeks. It gets even worse. According to Bloomberg, on a share-weighted basis, S&P 500 profits are expected to have dropped by 7.2% in 4Q, while revenues are expected to fall by 3.1%.

This would represent the worst U.S. earnings season since 3Q 2009, and a third straight quarter of negative profit growth. It’s no longer simply a recession: as noted above, the Q4 EPS drop follows declines of 3.1% in Q3 and 1.7% in Q2. it is… whatever comes next. As Bloomberg adds, the main driving forces behind drop in U.S. earnings are the rise in the dollar index (thanks Fed) and the drop in average WTI oil prices. However, since more than half of all industries are about to see an EPS decline, one can’t blame either one or the other. So while we know what to expect from Q4, a better question may be what is coming next, and according to the penguin brigade, this time will be different, and the hockey stick which was expected originally to take place in Q4 2015 and then Q1 2016 has been pushed back to Q4 2016, when by some miracle, EPS is now expected to grow by just about 15%.

While oil prices flashing across traders’ terminals are at the lowest in a decade, in real terms the collapse is even deeper. West Texas Intermediate futures, the U.S. benchmark, sank below $30 a barrel on Tuesday for the first time since 2003. Actual barrels of Saudi Arabian crude shipped to Asia are even cheaper, at $26 – the lowest since early 2002 once inflation is factored in and near levels seen before the turn of the millennium. Slumping oil prices are a critical signal that the boom in lending in China is “unwinding,” according to Adair Turner, chairman of the Institute for New Economic Thinking.

Slowing investment and construction in China, the world’s biggest energy user, is “sending an enormous deflationary impetus through to the world, and that is a significant part of what’s happening in this oil-price collapse,” Turner, former chairman of the U.K. Financial Services Authority, said. The nation’s economic expansion faltered last year to the slowest pace in a quarter of a century. “You see a big destruction in the income of the oil and commodity producers,” Turner said. “That is having a major effect on their expenditure across the world.” The benefit for consumers from historically low oil prices is being blunted by changes in fuel taxation and a reduction in subsidies, according to Paul Horsnell at Standard Chartered in London. “But it certainly shows that current prices are very low by any description,” he said.

Think oil in the $20s is bad? In Canada they’d be happy to sell it for $10. Canadian oil sands producers are feeling pain as bitumen – the thick, sticky substance at the center of the heated debate over TransCanada’s Keystone XL pipeline – hit a low of $8.35 on Tuesday, down from as much as $80 less than two years ago. Producers are all losing money at current prices, First Energy Capital’s Martin King said Tuesday at a conference in Calgary. Which doesn’t mean they’ll stop. Since most of the spending for bitumen extraction comes upfront, and thus is a sunk cost, production will continue and grow. Canada will need more pipeline capacity to transport bitumen out of Alberta by 2019, King said.

Bitumen is another victim of a global glut of petroleum, which has sunk U.S. benchmark prices into the $20s from more than $100 only 18 months ago. It’s cheaper than most other types of crude, because it has to be diluted with more-expensive lighter petroleum, and then transported thousands of miles from Alberta to refineries in the U.S. For much of the past decade, oil companies fought environmentalists to get the pipeline approved so they could blend more of the tar-like petroleum and feed it to an oil-starved world. TransCanada is mounting a $15 billion appeal against President Barack Obama’s rejection of Keystone XL crossing into the U.S. – while simultaneously planning natural gas pipelines from Alberta to Canada’s east coast to carry diluted bitumen. Environmentalists are hoping oil economics finish off what their pipeline protests started.

If there was one silver-lining in the oil complex, it was the demand for VLCCs (as huge floating storage facilities or as China scooped up ‘cheap’ oil to refill their reserves) which drove tanker rates to record highs. Now, as Bloomberg notes so eloquently, it appears the party is over! Daily rates for benchmark Saudi Arabia-Japan VLCC cargoes have crashed 53% year-to-date to $50,955 (as it appears China’s record crude imports have ceased). In fact the rate crashed 12% today for the 12th straight daily decline from over $100,000 just a month ago…

China imported a record amount of crude last year as oil’s lowest annual average price in more than a decade spurred stockpiling and boosted demand from independent refiners. China’s crude imports last month was equivalent to 7.85 million barrels a day, 6% higher than the previous record of 7.4 million in April, Bloomberg calculations show.

China has exploited a plunge in crude prices by easing rules to allow private refiners, known as teapots, to import crude and by boosting shipments to fill emergency stockpiles. The nation’s overseas purchases may rise to 370 million metric tons this year, surpassing estimated U.S. imports of about 363 million tons, according to Li Li, a research director with ICIS China, an industry researcher. But given the crash in tanker rates – and implicitly demand – that “boom” appears to be over.

Volatility in the $5.3-trillion-a-day foreign exchange market is dragging down U.S. corporate earnings by the most since 2011, according to a report from FiREapps. Currency fluctuations eroded earnings for the average North American company by 12 cents per share in the third quarter, according to the Scottsdale, Arizona-based firm, which advises businesses and makes software to help reduce the effect of foreign-exchange swings. That’s the most in data going back at least four years, and is up from an average 3 cents per share in the second quarter. “This is the worst I’ve seen it,” FiREapps chief executive officer Wolfgang Koestersaid in a telephone interview. “Investors and analysts are taking a very close look at corporate results impacted by foreign exchange and recognize how material they are.”

A JPMorgan measure of currency volatility averaged 10.1 % during the third quarter, up from 6.3 % 12 months earlier. Last year, some of the biggest price swings came from unscheduled events, such as China’s August devaluation of the yuan, Switzerland’s decision to scrap its currency cap and plummeting commodity prices. Companies in North America lost at least $19.3 billion to foreign-exchange headwinds in the third quarter of 2015, FiREapps data showed. The losses grew by about 14 % from the second quarter. Of the 850 North American corporations that Fireapps analyzed, 353 cited the negative impact of currencies in their earnings, more than double the previous quarter. “That is the largest number of companies talking about currency impact that we’ve ever seen,” Koester said.

China’s yuan is garnering more attention from corporations amid concern that growth in the world’s second-largest economy is slowing, according to FiREapps. Yet North American firms remain most concerned about the effects of the euro, Brazilian real and Canadian dollar on their results. The currencies have fallen 8.3 %, 34 % and 16 % against the greenback over the past 12 months. The stronger U.S. dollar means higher, less-competitive prices for U.S. businesses seeking to sell their products overseas. Companies also take a hit when they account for revenue denominated in weaker overseas currencies, unless they hedged their exposure.

African exports to China fell by almost 40% in 2015, China’s customs office says. China is Africa’s biggest single trading partner and its demand for African commodities has fuelled the continent’s recent economic growth. The decline in exports reflects the recent slowdown in China’s economy. This has, in turn, put African economies under pressure and in part accounts for the falling value of many African currencies. Presenting China’s trade figures for last year, customs spokesman Huang Songping told journalists that African exports to China totalled $67bn (£46.3bn), which was 38% down on the figure for 2014.

BBC Africa Business Report editor Matthew Davies says that as China’s economy heads for what many analysts say will be a hard landing, its need for African oil, metals and minerals has fallen rapidly, taking commodity prices lower. There is also less money coming from China to Africa, with direct investment from China into the continent falling by 40% in the first six months of 2015, he says. Meanwhile, Africa’s demand for Chinese goods is rising. In 2015 China sent $102bn worth of goods to the continent, an increase of 3.6%. Last year, South Africa hosted a China-Africa summit during which President Xi Jinping announced $60bn of aid and loans, symbolising the country’s growing role on the continent.

Investors pulled more money from emerging markets in the three months through December than ever before as investors dumped riskier assets in China amid concern the country’s currency will weaken further, according to Capital Economics. Capital outflows from developing nations reached $270 billion last quarter, exceeding withdrawals during the financial crisis of 2008, led by an exodus from China as investors pulled a record $159 billion from the country just in December, Capital Economics’ economist William Jackson said in a report. Excluding outflows from the world’s second-largest economy, emerging markets would have seen inflows in the quarter, he said.

“This appears to reflect a growing skepticism in the markets that the People’s Bank can keep the renminbi steady,” Jackson said in the note, which was published Wednesday. “Given the fresh sell-off in EM financial markets and growing concerns about the level of the renminbi, it seems highly likely that total capital outflows will have increased” in January, he said. Investor skepticism increased last year as a surprise devaluation of China’s yuan roiled global markets and triggered a $5 trillion rout in the nation’s equity markets, casting doubt on the government’s ability to contain the selloff and support growth.

Chinese leaders have since then stepped up efforts to restrict capital outflows and prop up share prices despite pledges to give markets greater sway and allow money to flow freely across the nation’s borders within five years. The yuan traded in the mainland market declined 4.4% in 2015, the most since 1994. Outflows from emerging markets rose to a record $113 billion in December, Capital Economics said. Over 2015, investors pulled $770 billion from developing nations, compared with $230 billion a year earlier.

China’s government bonds advanced, pushing the 10-year yield to a record low, as the central bank stepped up cash injections and volatile stock and currency markets drove demand for safety. The offshore yuan traded in Hong Kong declined for the first time in six days on speculation a narrowing gap with the Shanghai rate will dissuade the People’s Bank of China from stepping into the market, while Chinese equities slid below the lowest levels of last year’s market selloff. “For local investors, there’s nothing to buy,” said Li Liuyang at Bank of Tokyo-Mitsubishi. “Equities are not performing well, so bonds become the natural investment target. The PBOC increased reverse repo offerings partly because it may be taking some preemptive measures before next month’s Lunar New Year holidays.”

The yield on debt due October 2025 fell as much as three basis points to 2.70%, the least for a benchmark 10-year note in ChinaBond data going back to September 2007. The previous low was 2.72% in January 2009, during the global financial crisis. The PBOC conducted 160 billion yuan ($24 billion) of seven-day reverse-repo agreements in its open-market operations on Thursday, up from 70 billion yuan a week ago. That’s the biggest one-day reverse repo offerings since February 2015, data compiled by Bloomberg show. The PBOC injected a net 40 billion yuan this week, taking its total additions to 230 billion yuan so far this month. “The PBOC wants to keep liquidity abundant onshore to bolster the economy,” said Nathan Chow at DBS Group. “It’s also trying to calm the currency market as the yuan declined significantly last week and caused high volatility. But in the long run, the yuan will depreciate as the fundamentals are still weak.”

China’s better-than-expected trade figures in December have sparked questions over whether trade flows have been inflated by investors evading capital controls and the extent of incentives being offered by government agencies to prop up exports. China reported Wednesday that exports in December declined 1.4% year on year. This was much better than the 8% drop expected by economists in a WSJ survey and compared with a 6.8% decline in November, allowing Beijing to end the trading year on a stronger note. Imports fell by 7.6% last month, better than the expected 11% decline, compared with an 8.7% drop in November. The December trade figures also were helped by favorable comparisons with year-earlier figures, economists said.

Of particular note was a 64.5% jump in China’s imports from Hong Kong, the strongest pace in three years, analysts said. This compared with a 6.2% decline for the January-November period. ”It really looks like capital flight,” said Oliver Barron with investment bank North Square Blue Oak. “This has artificially inflated the total import data.” China in recent months has struggled to adjust to massive capital outflows as Chinese investors seek better returns overseas. China saw its foreign exchange hoard drop 13.3% in 2015, or by $500 billion, to $3.3 trillion by the end of December. Under Beijing’s strict capital controls, consumers are only allowed to purchase $50,000 worth of U.S. dollars each calendar year. But manipulated foreign trade deals offer a way around tightening restrictions, say economists.

In an effort to stem the outflow, Beijing’s foreign exchange regulator announced stricter supervision starting January 1 to screen suspicious individual accounts and crack down on organized capital flight, according to an online statement. Bank customers also have reported more difficulty recently exchanging yuan into dollars, with some forced to wait four days to complete a transaction that normally takes one. And China has cracked down on illegal foreign-exchange networks, including a bust announced in November in Jinhua, a city of five million people in eastern Zhejiang province, allegedly involving eight gangs operating from over two dozen “criminal dens” that reportedly handled up to $64 billion in unauthorized transactions, according to state media and a detailed police report.

The official People’s Daily newspaper said 69 people had been criminally charged and another 203 people had been given administrative sanctions. ”Regulators have been trying really hard to close the loopholes,” said Steve Wang with Reorient Financial, adding that the market seems skeptical of Wednesday’s trade figures. The Shanghai Composite Index fell 2.4%. “I don’t think Hong Kong has been buying or selling any more from China. The December data is a huge question mark,” he added. An example of how a Chinese company might move capital abroad using trade deals would be to import 1 million widgets at $2 apiece from a Hong Kong partner or subsidiary company, paying the $2 million, analysts said. It then exports the same widgets at $1 apiece, receiving $1 million from the Hong Kong entity. The goods are back where they started, but $1 million has now moved offshore.

China exports to Hong Kong rose 10.8% from a year earlier for the biggest gain in more than a year, making the city the biggest destination for shipments last month and spurring renewed skepticism over data reliability and the broader recovery in the nation’s outbound trade. Exports to Hong Kong rose to $46 billion last month, according to General Administration of Customs data released Wednesday. That was the highest value in almost three years and the biggest amount for any December period in the last 10 years, customs data show. Imports from Hong Kong surged 65%, the most in three years, to $2.16 billion. Economists said the surprise gains may harken back to past instances of phony invoicing and other rules skirted to escape currency restrictions.

China’s government said in 2013 some data on trade with Hong Kong were inflated by arbitrage transactions intended to avoid rules, an acknowledgment that export and import figures were overstated. The increase in exports to Hong Kong and China’s imports from the city probably indicate “fake invoicing,” said Iris Pang at Natixis in Hong Kong. Invoicing of China trade should be larger in December because of the wider gap between the onshore yuan and the offshore yuan traded in Hong Kong, she said. China’s exports to the Special Administrative Region of more than 7 million people eclipsed the $35 billion tallies last month for both the U.S. and the EU, the data show. Exports to Brazil, Canada, Malaysia, Russia all dropped more than 10%.

The imports gain “points to potential renewed fake trade activities,” said Larry Hu at Macquarie. When the yuan rose in 2013, exports to Hong Kong were inflated artificially, he said, and “now it’s just the opposite.” China’s total exports rose 2.3% in yuan terms from a year earlier, the customs said, after a 3.7% drop in November. Imports extended declines to 14 months. The recovery in exports in December may prove to be a temporary one due to a seasonal increase at the end of the year, and it doesn’t represent a trend, a spokesman for customs said after the Wednesday briefing. A weak yuan will help exports, but that effect will gradually fade, the spokesman told reporters in Beijing. Morgan Stanley economists led by Zhang Yin in Hong Kong also said in a note Wednesday that the higher-than-expected trade growth may have been affected by currency arbitrage. Overall external demand remained weak, as shown by anemic export data reported by South Korea and Taiwan, he said.

As Chinese markets tanked last week, China Inc. appeared to be rallying to their support. At least 75 Chinese companies issued statements during the past week and a half, saying their biggest shareholders would be holding on to their stakes in order to protect investor interests. Officially, the companies were acting spontaneously. But privately, people close to Chinese regulators as well as some of the companies themselves said they were prompted to release the statements by exchange officials, who had called and asked them to issue expressions of support. In many cases, the statements contained similar or nearly identical language. The behind-the-scenes activity reflects the secretive, unofficial side to Chinese regulators’ attempts to bolster the country’s sagging stock markets.

The regulators’ varied arsenal includes tactics such as phone calls from exchange officials to big holders of shares, urging them not to sell, as well as pumping hundreds of billions of yuan into the markets through government-affiliated funds. The hand of the regulators was most apparent over the summer, when a 43% plunge in the Shanghai Composite Index over slightly more than two months was accompanied by dozens of declarations by brokerages and fund managers abjuring stock sales, as well as huge purchases of shares in bellwether Chinese stocks by a shadowy group of firms known as the “national team.” Brokers, company executives and people close to Chinese regulators say tactics have become more subtle during the current market downturn: The national team hasn’t been making the high-profile buys of half a year ago, and regulators have been less overt in their requests for cooperation.

An executive at one environmental technology firm listed on the Shenzhen exchange said that in July, the bourse sent a letter demanding the company release a statement saying its controlling shareholders wouldn’t unload stock. Last week, the exchange was more low key, he said, phoning up and urging the company to release another statement to set an example for other firms. But the flurry of companies declaring their support for the market in recent days shows that Chinese regulators still haven’t given up on behind-the-scenes efforts to guide the direction of stocks. “We issued the statement because the [Shenzhen] exchange encouraged listed firms to maintain shareholdings,” said an executive at LED device-maker Shenzhen Jufei who requested anonymity. “You can think of this as a concerted effort by listed firms to voluntarily stabilize the market.”

It might be easy to conclude China’s unprecedented retreat from Treasuries is bad news for America. After all, as the biggest overseas creditor to the U.S., China has bankrolled hundreds of billions of dollars in deficit spending, particularly since the financial crisis. And that voracious appetite for Treasuries in recent years has been key in keeping America’s funding costs in check, even as the market for U.S. government debt ballooned to a record $13.2 trillion. Yet for many debt investors, there’s little reason for alarm. While there’s no denying that China’s selling may dent demand for Treasuries in the near term, the fact the nation is raising hundreds of billions of dollars to support its flagging economy and stem capital flight is raising deeper questions about whether global growth itself is at risk.

That’s likely to bolster the haven appeal of U.S. debt over the long haul, State Street Corp. and BlackRock Inc. say. Any let up in Chinese demand is being met with record buying by domestic mutual funds, which has helped to contain U.S. borrowing costs. “You have China running down reserves and Treasuries are a big portion of reserves, but even with that we still think the weight of support” will boost demand for U.S. debt, said Lee Ferridge, the head of macro strategy for North America at State Street, which oversees $2.4 trillion. The question is “if China slows, where does growth come from. That’s what’s been worrying a lot of people coming into 2016.”

Companies around the world will be forced to add close to $3tn of leasing commitments to their balance sheets under new rules from US and international regulators — significantly increasing the debt that must be reported by airlines and retailers. A new financial reporting standard — the culmination of decades of debate over “off-balance sheet” financing — will affect more than one in two public companies globally. Worst hit will be retail, hotel and airline companies that lease property and planes over long periods but, under current accounting standards, do not have to include them in yearly reports of assets and liabilities. In these sectors, future payments of off-balance sheet leases equate to almost 30% of total assets on average, according to the International Accounting Standards Board, which collaborated with the US Financial Accounting Standards Board on the new rule.

Hans Hoogervorst, IASB chairman, said: “The new Standard will provide much-needed transparency on companies’ lease assets and liabilities, meaning that off-balance-sheet lease financing is no longer lurking in the shadows”. As a result of the accounting change, net debt reported by UK supermarket chain Tesco would increase from £8.6bn at the end of August to £17.6bn, estimated Richard Clarke, an analyst from Bernstein. However, while the new standard would make Tesco look more indebted, Mr Clarke added that the assets associated with the leases would also come on to the company’s balance sheet, so “the net effect would be neutral.” Investors warned that the new standards could affect some groups’ banking covenants and debt-based agreements with lenders, but said they would make it easier to compare companies that uses leases with those that prefer to borrow and buy.

Vincent Papa, director financial reporting policy at the Chartered Financial Analysts Institute, which has been pushing for these changes since the 1970s, said: “Putting obligations on balance sheets enables better risk assessment. It is a big improvement to financial reporting.” For some airlines, the value of off-balance- sheet leases can be more than the value of assets on the balance sheets, the IASB noted. It also pointed out that a number of retailers that had gone into liquidation had lease commitments that were many times their reported balance sheet debt. [..] In 2005, the SEC calculated that US companies had about $1.25 trillion of leasing commitments that were not included in assets or liabilities on balance sheets. Six years later, the Equipment Leasing and Finance Foundation in the US said that “Capitalising operating leases will add an estimated $2 trillion and 11% more reported debt to the balance sheets of US-based corporations…and could result in a permanent reduction of $96bn in equity of US companies. ”

A bitter row has broken out over the allegedly carcinogenic qualities of a widely-used weedkiller, ahead of an EU decision on whether to continue to allow its use. At issue is a call by the European Food and Safety Authority (Efsa) to disregard an opinion by the WHO’s International Agency for Research on Cancer (IARC) on the health effects of Glyphosate. Glyphosate was developed by Monsanto for use with its GM crops. The herbicide makes the company $5bn (£3.5bn) a year, and is used so widely that its residues are commonly found in British bread. But while an analysis by the IARC last year found it is probably carcinogenic to humans, Efsa decided last month that it probably was not. That paves the way for the herbicide to be relicensed by an EU working group later this year, potentially in the next few weeks.

Within days of Efsa’s announcement, 96 prominent scientists – including most of the IARC team – had fired off a letter to the EU health commissioner, Vytenis Andriukaitis, warning that the basis of Efsa’s research was “not credible because it is not supported by the evidence”. “Accordingly, we urge you and the European commission to disregard the flawed Efsa finding,” the scientists said. In a reply last month, which the Guardian has seen, Andriukaitis told the scientists that he found their diverging opinions on glyphosate “disconcerting”. But the European Parliament and EU ministers had agreed to give Efsa a pivotal role in assessing pesticide substances, he noted. “These are legal obligations,” the commissioner said. “I am not able to accommodate your request to simply disregard the Efsa conclusion.”

India’s government has approved a $1.3bn insurance scheme for farmers to protect against crop failures, saying it was intended to put a halt to a spate of suicides. Two successive years of drought have battered the country’s already struggling rural heartland, with farmer suicides in rural areas regularly hitting the headlines. More than 300,000 farmers have killed themselves in India since 1995. Under the new scheme, farmers will pay premiums of as little as 1.5% of the value of their crops, allowing them to reclaim their full value in case of natural damage, the government said. “The scheme will be a protection shield against instances of farmer suicides because of crop failures or damage because of nature,” home minister Rajnath Singh said on Wednesday after the cabinet approved the scheme.

The Prime Minister Crop Insurance Scheme is also an attempt by Narendra Modi’s government to woo the country’s powerful farming community after being beaten in two recent state elections. “This scheme not just retains the best features of past policies but also rectifies all previous shortcomings… This is a historic day,” Modi said in a tweet. Previous crop insurance schemes have been criticised by the agricultural community as being too complex or for having caps that prevented them from recouping the full commercial value in the case of damage. Take-up of existing schemes by farmers is as low as 23%, the agriculture minister Radha Mohan Singh said, adding that he hoped to increase coverage to 50%. The heavily subsidised scheme will come into effect in April, a major crop-sowing season.

A senior Greek official has said the government will ask Europe’s border protection agency Frontex to help set up a sea deportation route to send migrants who reach the country illegally back to Turkey. The official told AP the plan would involve chartering boats on Lesvos and other Greek islands to send back migrants who were not considered eligible for asylum in the EU. The official spoke on condition of anonymity because Athens hasn’t yet formally raised the issue with other European governments. More than 850,000 migrants and refugees reached Greece in 2015 on their route through the Balkans to central Europe. But the EU is seeking to toughen and better organize procedures for asylum placements, while Balkan countries outside the EU have also imposed stricter transit policies.

As twilight falls outside the Hellenikon shelter – a former Olympic field hockey venue currently housing about 280 people – Iranian men play volleyball, a red line on the ground serving as a notional net. Inside, migrants are coming to terms with their bleak future. “I can’t go back to Somalia,” said English teacher Ali Heydar Aki, who hoped to settle in Europe and then bring his family. “I have sold half my house” to fund the trip. While it’s unclear exactly how many are stuck in Greece, a comparison of arrivals there and in FYROM since late November leaves about 38,000 people unaccounted for. Greek immigration minister Ioannis Mouzalas’ best guess is “a few thousand.” “But (that’s) a calculation based on experience, not something else,” he said.

Syed Mohammad Jamil, head of the Pakistani-Hellenic Cultural Society, says about 4,000 Pakistanis could be stuck in Greece, mostly still on the islands, and about as many Bangladeshis. “Every day we get … phone calls from people in tears asking for help,” he said. “We can’t help – send them where? Germany, Spain, Italy, England? We can’t.” All now face two legal options: To seek asylum in Greece – which has 25% unemployment and a crumbling welfare system – or volunteer for repatriation. Greek authorities have recorded an increase in both since FYROM tightened controls. Karim Benazza, a Moroccan hotel worker in his 20s, has signed up to go home on Jan. 18.

“This is all I do now, smoke and smoke, but no money, no food,” he said, lighting a cigarette outside the International Organization for Migration building. “There is nothing for us in Greece, and the Macedonian border is closed.” Daniel Esdras, IOM office head in Greece, sees a steep increase in voluntary repatriations, which the IOM organizes. About 800 people registered in December and 260 have been sent home. “It’s one thing to return in handcuffs … and quite another to go as a normal passenger with some money in your pocket, because we give them each €400,” Esdras said.

More than 1,000 migrants and refugees arrived at Greece’s biggest port of Piraeus near Athens on Wednesday as the influx of people fleeing conflict zones for Europe continued unabated into the winter months. More than 1 million refugees and migrants braved the seas in 2015 seeking sanctuary in Europe, nearly five times more than in the previous year, according to the United Nations’ refugee agency. Most entered through Greece’s outlying islands. So far this year, 31% of arrivals to Europe have been children, said medical aid group Medecins Sans Frontieres, which has been treating arrivals to the Greek islands. About 5,700 children crossed the narrow but dangerous sea passage between Greece and Turkey in just 12 days aboard rickety, overcrowded boats, it said.

“I leave my home, my country [because] there was violence, it was not safe,” said 18-year-old Idris, who left his home and family behind in Afghanistan three months ago, traveling alone through Turkey and hoping to reach Germany to study. As others disembarked from the ferry on Wednesday, volunteers passed out hot tea and fruit to help them get through the next leg of their journey, an eight-hour bus ride from Athens to Greece’s northern border with Former Yugoslav Republic of Macedonia [FYROM]. The ferry picked up a total of 1,238 migrants and refugees from the Eastern Aegean islands of Lesvos and Chios. Among those was 25-year-old Salam, from the Syrian city of Homs, who said he had lived in a number of different cities before the fighting led him and his friends to flee. “[They killed] women and children and men,” said Salam, who also hopes to reach Germany. [It was] very very very bad in Syria.”

The number of refugees entering Europe in the first 10 days of 2016 is already three times the level in all of January 2015, signaling no let up in the pressure facing the region’s leaders amid the biggest wave of migration since World War II. The number of migrants crossing the Mediterranean Sea to the European Union from Turkey, the Middle East and North Africa reached 18,384 through Jan. 10, according to the United Nations Refugee Agency. That compares with 5,550 in January last year. “This year, these weeks, the coming months must be dedicated to delivering clear results in terms of regaining controls of flows and of our borders,” EC Vice President Frans Timmermans told reporters in Brussels on Wednesday after discussing the latest situation with EU commissioners.

Turmoil in Syria and across the Arab world triggered an influx of more than 1 million people arriving in the EU last year. Faced with migration in such unprecedented numbers, governments have reintroduced internal border checks, tried – and failed – to share refugees between one another and have been forced to defend their policies amid anger at violence allegedly perpetrated by the recent arrivals.

The number of refugees entering the EU increased month-on-month from January 2015 until hitting a peak of 221,374 in October, according to the agency. The level fell back to 118,445 last month as bad weather deterred people from making the journey. Almost a third of those arriving are children. So far this year 49 people have either died or are missing having attempted to cross into Europe. EU countries need to work together to tackle the “root causes” of the refugee influx, Timmermans said. Work must also step up on “returning those who have no right to international protection.”

Despite the ongoing propaganda reinforcing America’s “cleanest sheets in a brothel” economic growth, the fact is, there is a reason why The Fed folded, why Draghi doubled-down, why China cut, and why Kuroda will likely unleash moar QQE this week. It appears the ‘trap’ that central planners have set for themselves – by enabling massive financial asset inflation in the face of what is now the longest streak of economic weakness and data disappointment on record – now looks set to prove their impotence and/or Enisteinian insanity. As Ice Farm Capital notes: “.. a year ago were looking at 5yr inflation breakevens around 1.5%. They have since deteriorated to 1.15% (by way of 1%) and this week we are expecting a Q3 GDP print more like 1.5% – a deceleration of a full 240bps.”

“Corporate profit margins have taken a sharp hit and corporate profits for the S&P are now down 3% yoy despite continued share buybacks. Through this entire period, markets have continually expected happy days to be just around the corner.”

As a result, we have seen economic surprises for the US negative for the longest stretch in the history of the data series:

To make it a little clearer, this period of economic weakness and disappointment is not just the longest on record, but it is entirely unprecedented…

Quarterly profits and revenue at big American companies are poised to decline for the first time since the recession, as some industrial firms warn of a pullback in spending. From railroads to manufacturers to energy producers, businesses say they are facing a protracted slowdown in production, sales and employment that will spill into next year. Some of them say they are already experiencing a downturn. “The industrial environment’s in a recession. I don’t care what anybody says,” Daniel Florness, chief financial officer of Fastenal Co., told investors and analysts earlier this month. A third of the top 100 customers for Fastenal’s nuts, bolts and other factory and construction supplies have cut their spending by more than 10% and nearly a fifth by more than 25%, Mr. Florness said.

Caterpillar last week reduced its profit forecast, citing weak demand for its heavy equipment, and 3M, whose products range from kitchen sponges to adhesives used in automobiles, said it would lay off 1,500 employees, or 1.7% of its total, as sales growth sagged for a wide range of wares. The weakness is overshadowing pockets of growth in sectors such as aerospace and technology. Industrial companies are being buffeted on multiple fronts. The slump in energy prices has gutted demand for drilling equipment and supplies. Economic expansion is slowing in China and major emerging markets such as Brazil, which U.S. companies have relied on for sales growth. And the dollar’s strength also has eroded overseas profits.

The drag on earnings and sluggish growth projections for next year come as the Federal Reserve considers raising interest rates for the first time in nine years, and could add momentum to those in favor of postponing any rate increase until next year. Profit and revenue are falling in tandem for the first time in six years, with a third of S&P 500 companies reporting so far. Analysts expect the index’s companies to book a 2.8% decline in per-share earnings from last year’s third quarter, according to Thomson Reuters. Sales are on pace to fall 4%—the third straight quarterly decline. The last time sales and profits fell in the same quarter was in the third period of 2009.

European and Balkan leaders agreed on measures early Monday to slow the movement of tens of thousands whose flight from war and poverty has overwhelmed border guards and reception centers and heightened tension among nations along the route to the European Union’s heartland. In a statement to paper over deep divisions about how to handle the crisis, the leaders committed to bolster the borders of Greece as it struggles to cope with the wave of refugees from Syria and beyond that cross over through Turkey. The leaders decided that reception capacities should be boosted in Greece and along the Balkans migration route to shelter 100,000 more people as winter looms. They also agreed to expand border operations and make full use of biometric data like fingerprints as they register and screen migrants, before deciding whether to grant them asylum or send them home.

“The immediate imperative is to provide shelter,” European Commission President Jean-Claude Juncker said after chairing the mini-summit of 11 regional leaders in Brussels. “It cannot be that in the Europe of 2015 people are left to fend for themselves, sleeping in fields.” Nearly 250,000 people have passed through the Balkans since mid-September. Croatia said 11,500 people entered its territory on Saturday, the highest tally in a single day since Hungary put up a fence and refugees started moving sideways into Croatia a month ago. Many are headed northwest to Austria, Germany and Scandinavia where they hope to find a home. “This is one of the greatest litmus tests that Europe has ever faced,” German Chancellor Angela Merkel told reporters after the summit. “Europe has to demonstrate that it is a continent of values and of solidarity.”

“We will need to take further steps in order to get through this,” she said. Slovenian Prime Minister Miro Cerar said his small Alpine nation was being overwhelmed by the refugees – with 60,000 arriving in the last 10 days – and was not receiving enough help from its EU partners. He put the challenge in simple terms: if no fresh approach is forthcoming “in the next few days and weeks, I do believe that the European Union and Europe as a whole will start to fall apart.” The leaders agreed to rapidly dispatch 400 border guards to Slovenia as a short-term measure. As they arrived at the hastily organized meeting, some leaders traded blame for the influx with their neighbors, with Greece targeted for the mismanagement of its porous island border.

“We should go down south and defend the borders of Greece if they are not able to do that,” said Hungarian Prime Minister Viktor Orban, who claimed he was only attending the meeting as an “observer” because Hungary is no longer on the migrant route since it tightened borders. But the country that many say is another key source of the flow – Turkey – was not invited, and some leaders said that little could be done without its involvement. “It has to be tackled in Turkey and Greece, and this is just a nice Sunday afternoon talk,” Croatian Prime Minister Zoran Milanovic said, after complaining about having to leave an election campaign to take part in the mini-summit of nations in Europe’s eastern “migrant corridor.”

European leaders clashed over how to manage the influx of hundreds of thousands of refugees forging through the region’s eastern flank as they warned that Europe is buckling under the strain of the crisis. While 11 leaders including German Chancellor Angela Merkel managed to come up with short-term fixes at a summit on Sunday, including the provision of emergency shelter for 100,000 refugees and a stepped-up system for their registration, the meeting laid bare tensions between nations that risk fraying the fragile fabric of cooperation in addressing the growing problem. “This is one of the greatest litmus tests that Europe has ever faced.” Merkel said after the gathering in Brussels. “We will need to take further steps to get through this litmus test.”

With winter approaching and more than a million migrants set to reach the European Union this year, national authorities have shut their borders and waved asylum seekers through to neighboring countries as they struggle to get a grip on Europe’s largest influx of refugees in seven decades. “We have made clear to everyone this evening that waving them through has to stop,” European Commission President Jean-Claude Juncker said. While it’s important to implement measures agreed on Sunday, “there will be no miracle cure.” The situation in the Western Balkans – the focus of the summit in Brussels – has worsened over the past few months, aggravating deep-seated distrust between nations that emerged from the violent breakup of the former Yugoslavia.

The main flow of migrants fleeing conflict-stricken nations changed from a route through southern Europe to one leading from Turkey to Greece and through countries including Croatia, Serbia and Slovenia. “If we do not deliver some immediate and concrete actions on the ground in the next few days and weeks, I do believe that the European Union and Europe as a whole will start falling apart,” Slovenian Prime Minister Miro Cerar told reporters before the meeting. Greece, which is at the front line for refugees arriving in Europe, agreed to provide temporary shelter for 30,000 refugees by the end of the year, with the UN High Commissioner for Refugees supporting a further 20,000 places in the country.

An additional 50,000 places will be established by the countries along the Western Balkan route, according to a statement issued after the gathering. Countries also agreed to work together and with Frontex, the EU border-management agency, to bolster frontier controls and cooperation, including between Turkey and Bulgaria and between Greece and Macedonia. Greece fended off “absurd proposals” at the meeting, including allowing countries to block migrants entering from neighboring countries and giving Frontex a new undertaking on the Greek frontier with Macedonia, Prime Minister Alexis Tsipras said. Tsipras signaled disappointment that Turkey wasn’t invited to the summit because it plays “the basic role, the key role” in the crisis.

Greece’s migration minister has rejected accusations by Germany and other European countries that Greece is failing to defend its borders against mass migration, insisting that the refugees and other migrants trekking to Europe constitute a humanitarian crisis, not a defense threat. “Greece can guard its borders perfectly and has been doing so for thousands of years, but against its enemies. The refugees are not our enemies,” Yiannis Mouzalas said in an interview. Greece is under pressure from other European governments to use its coast guard and navy to control the huge influx of migrants who are making their way, via the Aegean Sea and Greece’s territory, from the Middle East to Northern Europe, especially Germany.

At a European summit in Brussels on Sunday, leaders from Greece and other countries on the latest migration route through the Balkans are facing allegations from Germany, Hungary and others that they are passively allowing migrants to pass through. “In practice what lies behind the accusation is the desire to repel the migrants,” said Mr. Mouzalas. “Our job when they are in our territorial sea is to rescue them, not [let them] drown or repel them.” Countries in Southern and Central Europe have been struggling to cope with the arrival of more than half a million people this year, with the largest number reaching Europe via Turkey and Greece. Many are from war-torn Syria and are treated as refugees from mortal danger, while others come from as far as Pakistan and are seen as having weaker claims to asylum in Europe.

Last week alone, Greece received about 48,000 migrants and refugees on its shores, the highest number of weekly arrivals this year, the International Organization for Migration said Friday. European Union authorities want countries along the transit route to agree on a plan to stop allowing people through, to fingerprint everyone who enters their territory, to beef up border surveillance in Greece, and to deploy 400 border guards to Slovenia, the latest hot spot. Athens opposes an idea floated by European Commission President Jean-Claude Juncker to set up joint Turkish-Greek border patrols. Greece and Turkey have long-standing disputes over their territorial waters, which have led to military tension over the years.

“This was an unfortunate statement by Mr. Juncker,” Mr. Mouzalas said. “The joint patrols have never been on the table. They have no point anyway, as they wouldn’t help ease the situation.” He said an alternative could be to set up a European body to patrol Turkish waters, closer to where many migrants begin their trip, to stem the flow of people attempting the perilous journey to the Greek islands. Mr. Mouzalas said Turkey should have been invited to Sunday’s summit. “Turkey is the door and Greece is the corridor; Europe should not treat Greece as the door,” Mr. Mouzalas said.

The EU is not a popular democracy – such was not, after all, the intention of its founding fathers. Jean Monnet recounts in his memoirs that the founding idea originated in the First World War and that the goal was to pool resources to enable the repulse of an enemy under a unified command – because coordination was failing to deliver under such conditions. It still fails. Ghita Ionescu, the founder of the London School of Economics journal Government and opposition wrote more than twenty years ago that the democratic deficit predated the EU, caused by the specialization of knowledge and increase in the power of experts on one hand, and on the other by the transnationalization of what had previously been national matters. Consequently, it became impossible for governments to act alone even after the “fullest consultation of their peoples”.

In 2004, the number of Europeans who believed that their voice counted in the EU was 39%. Ten years later, after the powers of the European Parliament have greatly increased, that figure has dropped to 29% (those who feel disempowered have increased from 52 to 66, an even greater difference). In other words, a majority always knew that the EU was not a popular democracy from the outset. Even in 2004, for every European who believed he had a voice in the EU two believed that they had none (Eurobarometer 2013a). Apart from Denmark, where an absolute majority believe that their voice counts in the EU (57% vs. 41%), in 26 countries people believe they have no influence in the EU in proportions that vary from 50% in Sweden and 51% in Belgium, up to 86% in both Cyprus and Greece – for obvious reasons.

But there is nothing new here, except, of course, the terrible constraints that the euro crisis has imposed on Greece, Cyprus and other countries, a tragedy caused by the complexity of an interdependent world which makes people less and less able to decide their own fate. In such complex situations, it is only the populists who offer simple solutions for how to empower voters. We do know what has caused the loss of trust: over two generations a significant question mark has arisen over whether the EU is the best vehicle to maximize social welfare for its various peoples. On one hand, there is the EU’s economic performance since the advent of the economic and growth crisis. On the other, there is loss of trust in European elites, perceived as demanding austerity from the people only to live a life of privilege themselves where taxes are concerned.

“These rates are a function of oversupply of shipping capacity and of lackluster demand for shipping containers to distant corners of the world. They’ve been in trouble since February. “Trouble” is a euphemism. They relentlessly plunged.”

A week ago, we pointed out how China’s dropping exports and plunging imports – the “inevitable fallout from China’s unsustainable and poorly executed credit splurge,” according to Thomson Reuters – had collided with long-term bets by the shipping industry that has been counting on majestic endless growth. The industry has been adding capacity in quantum leaps, where “the scramble to order so-called ultra-large container vessels had turned into a stampede,” as the Journal of Commerce put it. So we said, “Pummeled by Lousy Global Demand and Rampant Overcapacity, China Containerized Freight Index Collapses to Worst Level Ever”. And now, the China Containerized Freight Index (CCFI) has dropped to an even worse level.

Unlike a lot of official data emerging from China, the index, which is operated by the Shanghai Shipping Exchange and sponsored by the Chinese Ministry of Communications, is raw, unvarnished, not seasonally adjusted, or otherwise beautified. It’s volatile and a reflection of reality, as measured by how much it costs, based on contractual and spot market rates, to ship containers from China to 14 major destinations around the world. These rates are a function of oversupply of shipping capacity and of lackluster demand for shipping containers to distant corners of the world. They’ve been in trouble since February. “Trouble” is a euphemism. They relentlessly plunged.

By early July, the index dropped below 800 for the first time in its history, which started in 1998 when the index was set at 1,000. It soon recovered to about 850. And just when bouts of hope were rising that the worst was over, it plunged again and hit even lower levels. The latest weekly reading dropped another 1.7% from the prior week to 752.21, the worst level ever. The CCFI is now 30% below where it had been in February this year and 25% below where it had been 17 years ago at its inception.

The Shanghai Containerized Freight Index (SCFI), also operated by the Shanghai Shipping Exchange, tracks spot rates (not contractual rates) of shipping containers from Shanghai to 15 major destinations around the world. It’s even more volatile than the CCFI. But being based on spot rates, it’s a good indicator where the CCFI is headed. For last week, the SCFI plunged 5.4% to a new record low of 537.73, down 46% from where it had been at its inception in 2009 when it was set at 1,000 – and down 52% from February:

Major listed mall operators are also feeling the pain. Dalian Wanda, a big property developer, said in January it would close or restructure 30 of its retail venues and in August said more adjustments were underway. Malaysia-based Parkson, which operates more than 70 department stores in China, closed several of its stores in northern China last year following a 58% drop in China net profit in 2013. “As growth in retail sales slows because of the country’s lower GDP growth, and in cities where mall space is abundant, vacancy rates have risen substantially,” said Moody’s analyst Marie Lam in a research note. In its latest efforts to re-energize the economy, China’s central bank on Friday cut interest rates for the sixth time in less than a year.

Tim Condon, an economist at ING in Singapore warned that investors should not read China’s official retail figures as exclusively reflective of rising household consumption, noting that the data also capture some government purchases. [..] … the risk is that the frenetic pace of mall construction cascades into a bad-debt problem for banks if shoppers fail to match the zeal of property developers. China is currently the site of more than half the world’s shopping mall construction, according to CBRE, a real estate firm, even though it appears that many of these malls will not produce good returns for their investors.

A joint report by the China Chain Store Association and Deloitte showed that by the end of this year, the total number of China’s new malls is projected to reach 4,000, a jump of over 40% from 2011. Real estate analysts note that much of the surge in retail space construction came at the behest of local governments, who were rushing to push real estate development as part of attempts to stimulate the economy. The result has been malls built in haste and managed poorly. Not surprisingly, shoppers are voting with their feet. “If you build it and they’re not coming, that’s a non-performing loan,” said Condon of ING. “That’s the banks’ problem.”

China’s leaders gathering in Beijing this week to formulate the 13th five-year plan confront an era of sub-7% economic growth for the first time since Deng Xiaoping opened the nation to the outside world in the late 1970s. Old drivers such as manufacturing and residential construction are spluttering, and new areas like consumption, services and innovation aren’t picking up the slack quickly enough. While President Xi Jinping’s blueprint for 2016-2020 will seek to map out the structural change needed to propel the next leg in China’s march toward high-income status, a more immediate fix has been delivered with the sixth interest-rate cut in a year. “Defensive economic stimulus is needed to ensure that structural reforms maintain their momentum,” said Stephen Jen at hedge fund SLJ Macro Partners.

“If growth slows too much, the pace of structural reforms in China will also need to be curtailed. The government wants to conduct reforms before the macro conditions get worse.” Late Friday, China announced it would cut benchmark interest rates, stepping up the battle against deflationary pressures and easing the financing burden on indebted local governments and companies. It also lowered the amount of deposits banks must hold as reserves, adding liquidity that has been drained by intensifying capital outflows since August’s yuan devaluation. Underscoring the juggling act between reform and stimulus, Friday’s rate-cut announcement was accompanied by the scrapping of a ceiling on deposit rates.

[..] some critics argue administering more stimulus now is the wrong medicine and what’s needed are faster and deeper market-driven reforms. China’s sliding growth is mainly caused by too much easy credit channeled into over-investment, says Patrick Chovanec at Silvercrest Asset Management n New York. “The evidence of recent years shows that China is getting less and less real GDP growth for every yuan of credit created,” said Chovanec. “In other words, more easing won’t help, and could even hurt.” The cut to interest rates may only serve to give yet another lifeline to inefficient state companies, the entities most likely to borrow at the benchmark rate, said Andrew Polk at the Conference Board in Beijing. The risk is that these state companies add more industrial capacity with the funds, worsening deflation and tightening real monetary conditions for the rest of corporate China, he said.

Mounting bad loans are running down Chinese banks’ capital buffers, forcing them to turn to investors for fresh funds despite raising a record amount last year. Commercial banks are issuing expensive preference shares as well as convertible and perpetual bonds to shore up their capital bases, even after 2014’s bumper issuance when lenders raced to meet new regulatory requirements. But with bad loans up 30% in the first half of 2015 according to China’s banking regulator, doubts are growing about the ability of some banks to withstand the economic slowdown. “China is facing a systemic credit crisis,” said Jim Antos, banking analyst at Mizuho Securities in Hong Kong. “Chinese banks, until mid 2014, were able to cope with deterioration of loans. It seems that has changed.”

Banks’ operating profit margins also are expected to worsen, following the central bank’s decision on Friday to cut interest rates for the sixth time in less than a year. China’s listed commercial lenders raised $57.6 billion (£37.6 billion) last year to bolster their core capital according to Thomson Reuters data. But they may need to raise an additional 553 billion yuan (£54.7 billion) if a slowdown in the economy pushes the ratio of non-performing loans (NPLs) from 1.5 to 4%, according to calculations by Barclays’ banking analyst Victor Wang. Huaxia Bank is the latest lender to get approval from the Chinese Banking Regulatory Commission (CBRC) to issue 20 billion yuan in preference shares.The economic downturn and structural adjustment have caused “overdue loans to increase quickly, increasing pressure on credit risk management of the entire system,” the official said.

The slowdown in Chinese growth, confirmed by last week’s third-quarter GDP report, is feeding fears that the world economy faces a prolonged period of stagnation, perhaps even a new crisis. In fact, China’s weakness is one of the reasons to be optimistic about global growth. Of course, there are many reasons to be pessimistic too. Many emerging markets are in deep trouble. Many asset prices are unsustainably high. Seven years after the financial crisis erupted, major central banks are still forced to keep monetary policy at emergency settings. And the world is short of genuine consumer demand. It is on this last score that China gives cautious grounds for confidence. Chinese growth of about 3-5% as the economy weans itself off wasteful investment is exactly what the world needs.

As the price of oil, copper and other commodities falls in response to China’s structural adjustment, demand deflates in countries that export energy and natural resources. Brazil and Russia, already deep in recession, will be among those watching anxiously for any economic policy announcements at this month’s plenary meeting of the ruling Chinese Communist party. At the same time, however, global rebalancing transfers income from commodity producers to western consumers. Households have largely chosen so far to set aside money saved on cheaper petrol and lower home heating bills. Economic growth in Europe and the US is below par. But now they can see that oil prices are staying low, consumers are starting to spend the windfall.

We capture these two divergent trends in our forecast of a “deflationary boom” in the world economy — with deflation referring to the step-down in demand in China, emerging markets and commodity-producing countries, and boom describing the step-up in household spending in the US, the eurozone and Britain. If China does manage to make the transition to consumer-driven growth, lower investment would mean less crowding-out of opportunities for profitable capital expenditure in advanced economies. Investment growth would follow the consumer revival. For this rosy scenario to materialise, however, either an unprecedented degree of international co-ordination is required or quite a few pieces of the global economic puzzle have to fall into place independently. The latter is what has been happening over the past year. Can it continue? Here are some signposts investors should keep an eye on.

So what’s the problem? China, Japan and the eurozone are all easing policy. The US is going to delay tightening policy. More stimulus equals stronger growth and fends off the threat of deflation. That’s got to be good, hasn’t it? Well, only up to a point. Problem number one is that by deliberately weakening their exchange rates, countries are stealing growth from each other. Central banks insist that this does not represent a return to the competitive devaluations and protectionism of the 1930s, but it is starting to look awfully like it. Problem number two is that the monetary stimulus is becoming less and less effective over time. There are two main channels through which QE operates. One is through the exchange rate, but the policy doesn’t work if all countries want a cheaper currency at once.

Then, as the weakness of global trade testifies, it is simply robbing Peter to pay Paul. The other channel is through long-term interest rates, which are linked to the price of bonds. When central banks buy bonds, they reduce the available supply and drive up the price. Interest rates (the yield) on bonds move in the opposite direction to the price, so a higher price means borrowing is cheaper for businesses, households and governments. But when bond yields are already at historic lows, it is hard to drive them much lower even with large dollops of QE. In Keynes’s immortal words, central banks are pushing on a piece of string. Nor is that the end of it. Charlie Bean, until recently deputy governor of the Bank of England, is the co-author of a new report that looks at the impact of persistently low interest rates.

It concludes there is a danger that periods when interest rates are stuck at zero are likely to become more frequent, resulting in a greater reliance on unconventional measures such as QE that are subject to diminishing returns. “Second, and possibly more importantly, a world of persistently low interest rates may be more prone to generating a leveraged ‘reach for yield’ by investors and speculative asset-price boom-busts.” The current vogue is for macro-prudential policies – attempts to prevent bubbles from developing in specific asset markets, such as housing. But the paper makes the reasonable point that the macro-prudential approach – yet to be tried in crisis conditions – might not work. There is, therefore, a risk that tighter monetary policy in the form of higher interest rates will have to deployed in order to deal with the problems that monetary policy has created in the first place.

The fate of emerging market currencies is looming ever larger in the outlook for interest rates in the advanced world, promising that their central banks will keep policies super loose for some time to come. Ever since China sprang a surprise depreciation of the yuan in August, the resulting decline of a whole host of emerging market (EM) currencies has produced a disinflationary pulse that the world is ill prepared to withstand. The danger was clearly much on the mind of ECB President Mario Draghi on Thursday when he all but guaranteed a further easing as soon as December.

“The risks to the euro area growth outlook remain on the downside, reflecting in particular the heightened uncertainties regarding developments in emerging market economies,” warned Draghi, as he sent the euro reeling to two-month lows. They were also cited as a reason the U.S. Federal Reserve skipped a chance to hike interest rates in September. In a recent much-discussed speech, Fed board member Lael Brainard put the deflationary pressures emanating from emerging markets at the center of a forceful case against a “premature” tightening in policy. Fuelling these worries has been a downdraft in emerging market currencies caused in part by worries that higher U.S. rates would suck much needed capital from countries already struggling with large foreign currency debts.

The scale of the shift can be seen in the Fed’s trade weighted U.S. dollar index for other important trading partners, which includes China, Brazil, Mexico and the like. The dollar index began to take off in mid-July and by the end of September had surged over 6% to an all-time high. The impact was clear in U.S. bond markets, where yields on 10-year Treasury notes fell from 2.43% in mid-July to just 2.06% by early October. Investors expectations for U.S. inflation in five years time, a benchmark closely watched by the Fed, sank from a peak of 2.47% in early July to hit an historic trough of 1.99% three months later. That in turn saw investors drastically scale back expectations on when and how fast the Fed might hike. In mid-July, Fed fund futures for December implied a rate of 37 basis points.

By early October it implied only 18 basis points. All of which threatens to become a self-fulfilling cycle where the fear of a Fed hike spurs a steep fall in emerging currencies which in turn stirs concerns about disinflation and prevents the Fed from moving at all. “It’s a negative feedback loop,” says Robert Rennie, global head of market strategy at Westpac in Sydney. “China first flipped the switch with its depreciation of the yuan and the risk of capital flight from EM has kept the pressure on,” he added. “It’s now certain the ECB will ease in December and the Fed will find it tough to hike in December.”

Nowhere in the world is more at risk from the combination of Chinese economic slowdown, low commodity prices and imminent rises in US interest rates, than Africa. There is now a serious question over whether many African economies can achieve rapid growth in the years ahead or whether they are due to sink back into mediocre performance, thereby condemning their people to a continued low standard of living. The fact that this question now needs to be asked may come as a shock. Not long ago Africa was growing very strongly. Indeed, many good judges saw it as due to repeat the sort of economic take-off accomplished by several countries in east Asia a few decades previously. Yet, whereas five years ago the sub-Saharan African (SSA) growth rate was almost 7pc, last year it was down to less than 5pc.

Moreover, it looks as though this year’s performance will be even weaker, with growth dropping to 3pc. Nor is there any real prospect of a return to previous rapid growth rates. There is a suspicion in the minds of many investors that Africa’s recent growth surge was really just the outcome of the commodity boom. Accordingly, if we are in for a long period of commodity prices at about this level, then African growth prospects are pretty poor. Admittedly, there is considerable variation across countries. The worst hit are Nigeria, Zambia and Angola. The major economy that is doing best is Kenya. Meanwhile, SSA’s most developed economy, and the destination for much overseas investment, namely South Africa – where I was last week – seems to be mired in a phase of decidedly slow growth. This year it might manage 1.5pc.

But its medium-term prospects are pretty poor; its potential growth rate might only be 2pc. When you adjust for population growth, its potential growth of per capita GDP may only be 1.2pc per annum, which is pretty paltry compared to China – even after the recent slowdown. China’s importance to Africa is great – especially for South Africa, Angola, Congo and Zambia. But it can be exaggerated. Exports to China represent about 10pc of South Africa’s GDP. That is substantially lower than the UK’s exposure to the EU. In fact, China is Africa’s second largest export market. The largest is the EU, and by a considerable margin. Africa exports about 50pc more to the EU than it does to China. Accordingly, perhaps the most important factor bearing upon Africa’s economic future is what is going to happen to the euro-zone.

Japan’s economy has contracted so many times in the last few years that the meaning of recession has started to blur. If an economy is shrinking almost as often as it is growing, what does any single downturn say about its health? Now Japan appears to be faltering again. After a decline in the second quarter, there are signs that output may have slipped again in the third, driven down in part by a slowing Chinese economy. Economists expect any recession to be short and shallow, but the deeper lesson looks more troubling: Nearly three years after Prime Minister Shinzo Abe gained office on a pledge to end economic stagnation, a decisive break with the past still appears far off. “The potential growth rate is close to zero, so any small shock can put the economy into recession,” said Masamichi Adachi at JPMorgan Chase. “Growth expectations are anemic.”

As a result, some economists are betting that the Bank of Japan, which has been pumping vast amounts of money into the economy by buying up government debt, will pull the trigger on more stimulus at its next board meeting on Friday. The central bank’s aggressive intervention has been central to Mr. Abe’s policies, widely known as Abenomics. But events have conspired to blunt its impact. Last year, it was an ill-timed sales tax increase, which rattled Japanese consumers and dissuaded them from spending. Lately it has been the deceleration in China, whose factories have been important buyers of Japanese-made machinery. But the more fundamental problem, many specialists say, is that Japan’s economy simply doesn’t grow much in the first place.

Baseline growth is essentially zero. GDP is the same size it was in the mid-1990s, in part because the work force is shrinking. So where a faster-moving economy might simply lose momentum in response to headwinds, Japan’s goes into reverse. So far, Mr. Abe’s policies have done little to change the dynamic. “Overseas investors appear increasingly disillusioned with Abenomics,” Naohiko Baba at Goldman Sachs said last week. [..] Mr. Abe has continued to make ambitious promises. Last month, he set a goal of increasing Japan’s nominal economic output to 600 trillion yen by 2020 or soon after – an increase of about 20% from the current level. He gave little indication of how an economy that has not grown in two decades could expand by a fifth in just a few years.

Audacious pronouncements have been a hallmark of Abenomics from the start — part of what Mr. Kuroda has described as an effort to dispel Japan’s “deflationary mind-set.” But after three mostly lackluster years, its architects’ credibility is being questioned by many, including their natural supporters in the business elite. “I believe ¥600 trillion is an outrageous figure,” Yoshimitsu Kobayashi, chairman of the Japan Association of Corporate Executives, said after Mr. Abe announced his goal. “I see it as merely a political message.”

The Bank of Japan will release updated inflation forecasts this Friday. These are an indicator of when, or if, the bank’s board members see Japan reaching the inflation target of 2%. If history is a guide, the forecasts will probably be cut again, with some people with knowledge of the board’s discussions seeing the possibility of a reduction in the estimates for this and next fiscal years. The bank has had to lower estimates for all four years from 2014, as the chart below shows. Japan’s central bank was the second worst inflation forecaster, according to a Bloomberg survey which compared it to the Bank of Canada, the Fed, the ECB, and the Bank of England. The BOJ’s GDP estimates were the least accurate. While Governor Haruhiko Kuroda says he sees the nation hitting that target sometime around the six months from April, the bank isn’t forecasting inflation that high for any full year through the fiscal year that ends in March 2018.

Giorgos Taktikos was just 5 years old when he and his family began their long journey to the Sinai Desert by boarding a small boat in the middle of the night and leaving behind their native Chios. Today, at the age of 78, Taktikos is following history being written the other way round. As a former refugee, he is pained to observe the boatloads of people fleeing the Middle East and reaching Greek shores, while his mind races back to his own long and difficult journey into the unknown. A native of the Chiot village of Kourounia, Taktikos was one of over 30,000 Greeks who left several eastern Aegean islands during the German wartime occupation, some seeking refuge in Syria, others reaching South Africa, in an effort to escape hunger and war.

Boats crossing over, people drowning at sea, overflowing train wagons, refugee camps and deprivation – some things haven’t changed as far as the refugee journey goes. What has changed, however, is the destination: While people were striving to reach Syria back then, today it’s the other way round. “It’s hard to beat hunger and fear; refugee pain is tremendous,” said Taktikos. In the fall of 1942, hunger spread across occupied Greece: While there were severe food shortages in urban centers, the situation was even worse on the islands, given the British Royal Navy’s blockade of the Aegean and the Mediterranean region in general. Getting away was the only way out and for residents of the eastern Aegean, including Samos, Icaria, Chios, Lesvos and Limnos, this was made slightly easier given the islands’ proximity to Turkish shores.

“I was 5. There was plenty of poverty and hunger on the island. In November 1942, a time when it seemed the situation was about to get even worse, my father decided it was time for us to flee in order to survive. Along with two young men, we stole a boat which the Germans had requisitioned, and one night my my father, mother and younger sister, together with another two families, crossed over to Cesme. We were collected by Father Xenakis, an Orthodox priest who met refugees as they arrived and took them to an area where humanitarian organizations could look after them. The first thing he did when we arrived was to make sure the wooden boat was broken into little pieces, so as not to be detected by the Turkish coast guard, who would have forced us to get back on it and return to Greece.”

Hilarious. Flood the markets even more, bring down the price further, and then find you can’t make any money with your exports. And stop talking about OPEC ‘strategy’ already. Start thinking about US strategy.

The Obama administration’s move to allow exports of ultralight crude without government approval may encourage shale drilling and thwart Saudi Arabia’s strategy to curb U.S. output, further weakening oil markets, according to Citigroup Inc. A type of crude known as condensate can be exported if it is run through a distillation tower, which separates the hydrocarbons that make up the oil, according to U.S. government guidelines published yesterday. That may boost supplies ready to be sold overseas to as much as 1 million barrels a day by the end of 2015, Citigroup analysts led by Ed Morse in New York said in an e-mailed report. Saudi Arabia led the Organization of Petroleum Exporting Countries to maintain its production quota at a meeting last month even as a shale boom boosted U.S. output to the highest in more than three decades. That prompted speculation OPEC was willing to let prices fall to force some companies with higher drilling costs to stop pumping.

“U.S. producers are under the gun to reduce capital expenditures given lower prices,” Citigroup said in the report. “Now an export route provides a new lease on life that can further weaken crude oil markets and throw a monkey wrench into recent Saudi plans to cripple U.S. production.” Current U.S. export capacity is at about 200,000 barrels a day, which could be expanded to 500,000 a day by the middle of 2015, according to the bank. While the guidelines on the website of the Commerce Department’s Bureau of Industry and Security are the first public explanation of steps companies can take to avoid violating export laws, they don’t mean an end to the ban on most crude exports, which Congress adopted in 1975 in response to the Arab oil embargo. “While government officials have gone out of their way to indicate there is no change in policy, in practice this long-awaited move can open up the floodgates to substantial increases in exports by end-2015,” Citigroup said.

The U.S. produces about 3.81 million barrels a day of light and ultralight crude, according to the bank. West Texas Intermediate in New York dropped as much as 1.4% today to $53.38 a barrel, down 46% this year. Brent, the global marker crude, slid 1.8% to $56.87 in London, bringing losses in 2014 to 48%. Both benchmark grades are headed for the biggest annual slump since 2008. Oil producers have been testing the prohibition on crude exports as U.S. output surged amid technological advances that have opened up shale rock formations to development in Texas, North Dakota and elsewhere. The government earlier this year signaled a new way to export oil by approving permits for Pioneer and Enterprise to sell processed condensate. The guidelines seek to clarify how the Commerce Department will implement export rules and follow a “review of technological and policy issues,” Eric Hirschhorn, the under secretary for industry and security, said in a statement.

There are many strong contenders to be the chart of the year. Some point to oil prices, which shockingly plunged 50% in a matter of months. Others would look to the S&P 500, which exploded higher for a third year in row and has closed at a record high 53 times (so far), more than 20% of 2014’s trading days. They’re each compelling stories, but neither is as impactful nor as important as the breakout of the U.S. dollar. Presenting the chart of 2014: the broad trade-weighted dollar. The trade-weighted dollar tracks the U.S. greenback’s value against a basket of other currencies, representing both developing and emerging markets. It’s a broader measure than the regularly cited dollar index and the best indication of how a strong dollar hurts American companies that do business overseas.

The broad trade-weighted dollar is up 9% this year, now at the highest point since March 2009, when financial crisis fears had risk-averse investors pouring into the U.S. currency. It’s well above its average historical price over the last 15 years and now just 3.6% away from reaching those crisis highs. This time though it’s not about a flight to safety. Investors are flocking to the dollar because they like it. The U.S. economy has outperformed and American assets are in vogue. The move has been absolutely stunning. Break apart the trade-weighted dollar into individual pairs – the currency has strengthened nearly 12% against the euro this year, 13% against the yen and 18 to 19% against the Norwegian and Swedish currencies. The move is more dramatic when weighed against the trouble spots of 2014. The dollar has gained 44% versus the Russian ruble and 24% versus the Argentine peso. In fact, the U.S. greenback has strengthened against all developed and emerging currencies in the past 12 months.

“The rise of the U.S. dollar in 2014 is remarkable both by its intensity and weak support from expectations of Fed tightening,” according to Sebastien Galy, FX strategist at Societe Generale. “It tells us much about the intensity with which other central banks have tried to weaken their currencies,” he said. In other words, it’s not just a story of U.S. economic strength in the face of global weakness, but also the contrast to major central banks seeking to weaken their own currencies in the name of growth and export competitiveness. That trend should continue in the new year and ultimately fuel more worrisome trade tensions.

“The odds are that the U.S. dollar strength can go much further than currently expected, similarly the odds of … trade barriers are steadily rising,” Galy warned. As if that wasn’t enough, expectations that the Fed will begin to raise interest rates in the second half of 2015 have many believing the dollar has plenty of room to run. “The strength of the U.S. labor market and U.S. economy are making the Fed more confident that it can begin to raise rates next year,” wrote Lee Hardman, currency strategist at Bank of Tokyo Mitsubishi in a note after the last Fed meeting in mid-December. “The market is still not convinced that the Fed will tighten even at that more modest pace … leaving scope for U.S. short rates to continue to increase in the year ahead, supporting a stronger U.S. dollar.” Beyond the stunning breakout of the buck, the move is significant because the dollar is the backbone of the global financial system. It influences prices of all major commodities, the largest and most liquid debt and equity markets, and the world’s largest economy.

Commodities headed for the biggest annual loss since the global financial crisis in 2008, retreating for a record fourth year, as a global glut spurred a rout in oil prices and a stronger dollar cut the allure of raw materials. The Bloomberg Commodity Index dropped to the lowest level since March 2009 earlier today. It’s lost 16% this year, with crude, gasoline and heating oil the biggest decliners. A fourth year of losses would be the longest since at least 1991. Energy prices retreated in 2014 as a jump in U.S. drilling sparked a surge in output and price war with OPEC, which chose to maintain supplies to try to retain market share. The dollar climbed to the highest level in more than five years as a U.S. recovery spurred speculation that the Federal Reserve will start to raise borrowing costs next year. Commodities are set for a volatile year in 2015, with crude oil poised to extend its slump, according to Australia and New Zealand Bank.

“What we’re seeing is that supplies from North America have really outpaced worldwide demand growth and as a result, we have a supply glut,” Andy Lipow, president of Lipow Oil, said by phone. “And that of course has put pressure on prices over the last several months. And as a result, it’s dragging down commodities indexes as well.” Brent for February settlement traded at $57.01 a barrel on the London-based ICE Futures Europe exchange, with rice 49% lower this year. West Texas Intermediate dropped 1.1% to $53.55 a barrel on the New York Mercantile Exchange. Gasoline sank 49% this year. A slowdown in China also hurt demand for raw materials as policy makers grappled with a property slowdown, and data today showed a factory gauge at a seven-month low in December. The world’s biggest user of metals is headed for its slowest full-year economic expansion since 1990. China’s central bank cut interest rates last month for the first time since 2012.

With oil prices dropping, Alaska Gov. Bill Walker has halted new spending on six high-profile projects, pending further review. Walker issued an order Friday putting the new spending on hold. He cited the state’s $3.5 billion budget deficit, which has increased as oil prices have dropped sharply. With oil prices now around a five-year low, officials in Alaska and about a half-dozen other states already have begun paring back projections for a continued gusher of revenues. Spending cuts have started in some places, and more could be necessary if oil prices stay at lower levels. How well the oil-rich states survive the downturn may hinge on how much they saved during the good times, and how much they depend on oil revenues.

Some states, such as Texas, have diversified their economies since oil prices crashed in the mid-1980s. Others, such as Alaska, remain heavily dependent on oil and will have to tap into sizeable savings to get by. The projects Walker halted spending on include a small-diameter gas pipeline from the North Slope, the Alaska Dispatch News reported. The other projects are the Kodiak rocket launch complex, the Knik Arm bridge, the Susitna-Watana hydroelectric dam, Juneau access road and the Ambler road. “The state’s fiscal situation demands a critical look and people should be prepared for several of these projects to be delayed and/or stopped,” Walker’s budget director Pat Pitney said in an email.

According to Walker’s order, the hold on spending is pending further review. The administration intends to decide on project priorities near the start of Alaska’s legislative session Jan. 20, and no later than a Feb. 18 legal budgeting deadline, Pitney said. State lawmakers have final authority to decide whether the projects should continue to be funded, Pitney said. Contractually required spending and employee salaries will continue. Walker’s order asks each agency working on the projects to stop hiring new employees, signing new contracts and committing any new funding from other sources, including the federal government. The action follows a letter sent Tuesday by the state Legislature’s Republican leadership, who urged the governor to immediately cut spending levels in light of the budget crunch.

“If you repeat a falsehood long enough, it will eventually be accepted as fact.” In the financial markets and economics it is a common occurrence that the media and commentators will latch on to a statement that supports a cognitive bias and then repeat that statement until it is a universally accepted truth. When such a statement becomes universally accepted and unquestioned, well, that is when I begin to question it. One of those statements has been in regards to plunging oil prices. The majority of analysts and economists have been ratcheting up expectations for the economy and the markets on the back of lower energy costs. The argument is that lower oil prices lead to lower gasoline prices that give consumers more money to spend. The argument seems to be entirely logical since we know that roughly 80% of households in America effectively live paycheck-to-paycheck meaning they will spend, rather than save, any extra disposable income. As an example, Steve LeVine recently wrote:

“US gasoline prices have dropped for more than 90 straight days. They now average $2.28 a gallon, which is remarkable considering that just a few months ago, some of us were routinely paying $4 and sometimes close to $5. Not so coincidentally, the US economy surged by 5% last quarter, and does not appear to be slowing down. “

If you read the statement, how could one possibly disagree with such a premise? If I spend less money at the gas pump, I obviously have more money to spend elsewhere. Right? The problem is that the economy is a ZERO-SUM game and gasoline prices are an excellent example of the mainstream fallacy of lower oil prices.

Now, the argument is that the $16 saved by the consumer will be spent elsewhere. This is the equivalent of “rearranging deck chairs on the Titanic.” Increased consumer spending is a function of increases in INCOME, not SAVINGS. Consumers only have a finite amount of money to spend.

It’s no surprise that the number of U.S. oil rigs moves up and down with the price of oil, but the chart above offers an interesting glance at the relationship. Baker Hughes on Monday said the total number of U.S. rotary rigs fell by 35 to 1,840 in the week ended Dec. 26, the fifth consecutive weekly decline, bringing the total to its lowest level since April. “If OPEC’s goal is to slow U.S. oil production by dumping cheap oil into our market, they are having some success,” said Phil Flynn, senior market analyst Price Futures in Chicago. OPEC in November accelerated oil’s free fall when it refrained from cutting crude production. Saudi Arabia’s oil minister said earlier this month that a plunge to as low as $20 wouldn’t be enough to prompt a production cut.

The move has been described as a price war aimed primarily at North American shale producers, who had responded to high oil prices by ramping up production in recent years at a breakneck clip. Oil’s slide, which has seen Nymex futures, the U.S. benchmark, fall 50% from their June high above $107 to trade at five-and-a-half year lows below $54 a barrel, has been the fastest since 2008. That means rig counts will continue to decline, but the impact on supply will likely take “weeks if not months” to be reflected in hard production figures, said analysts at Commerzbank.

“Europe’s government bond markets all closed on Tuesday after another stellar year that has seen Italian and Spanish borrowing costs hit record lows and unglamorous but ultra-safe German debt enjoy its strongest year in six.”

Chinese and U.S. stocks headed the list of 2014 top performers while markets elsewhere ended the year on Wednesday on a cautionary note as worries about Greece’s future served as an excuse to take profits. The U.S. dollar lost a little of the recent gains that have made it the year’s star major currency, but European bonds yields scored all-time lows following a shockingly sharp fall in Spanish inflation on Tuesday. European stocks had a steady start as they wrapped up a year that has seen a 3.5% rise for the region as a whole but also sharp divergence, with near 30% losses for debt-strained Greece and Portugal. The stand-out global equity performer has been China, where the CSI300 index looked set to end 2014 with gains of nearly 50%.

Almost all of China’s rise came in the last couple of months, as hopes for more aggressive policy stimulus to counter its economic slowdown boosted banks and brokerages. Featuring on Wednesday were hefty gains for China’s biggest train makers, China CNR and CSR Corp, after they confirmed a $26 billion merger. “China stocks have done really well this year and the dollar move has also been very interesting,” said Alvin Tan, an FX strategist at Societe Generale in London. “It barely moved against the other major currencies in the first of the year and all the big gains came in the second half.” Trade elsewhere was thinned by holidays in Japan, Thailand, South Korea and the Philippines, while many markets in Europe were either shut or finishing early.

Europe’s government bond markets all closed on Tuesday after another stellar year that has seen Italian and Spanish borrowing costs hit record lows and unglamorous but ultra-safe German debt enjoy its strongest year in six. Among the scraps of news in Europe, two polls in Greece published late on Tuesday showed the anti-bailout party Syriza’s lead over the ruling conservatives had narrowed. The dollar was on track to end 2014 with a gain of 12% against a basket of major currencies, its best performance since 2005, and anticipated U.S. interest rate hikes may strengthen its appeal in the new year. It eased against the safe haven yen to stand at 119.64 from Tuesday’s peak of 120.69, as futures prices pointed to small gains for Wall Street when trading resumes following its 13% jump to an all-time high this year. The euro was undermined by sliding European yields amid intense speculation the European Central Bank will have to start buying government bonds to avert deflation. The single currency was stuck at $1.2154 having touched a 29-month trough of $1.2123.

Accusations that Greece’s far-left opposition party Syriza is “worse than communism” are propaganda, its head of economic policy insisted on Tuesday, arguing instead that the party would solve Greece’s “humanitarian crisis” if it came to power in January. Speaking to CNBC on Tuesday, John Milios said Syriza planned to stabilize Greece’s society and boost the economy. “We have to combat first the humanitarian crisis, people who don’t have the necessities — houses, food or the money for transportation,” he said. “We are confident that if we do this the economy will start to stabilize and the present turmoil will be past.” Greece’s political establishment was thrown into chaos on Monday, when its parliament’s failure to elect a president triggered an early general election – something that credit ratings agency Fitch warned on Tuesday would increase the risks to the country’s credit worthiness.

Anti-austerity Syriza appears confident that it can win the forthcoming election in January, however. Opinion polls released late on Monday showed Syriza had a 3% lead over Prime Minister Antonis Samaras’ party, although the lead has narrowed of late. But although attractive to voters, the party does not appear to be popular within the investment community. In November, an email written by Joerg Sponer, an investment analyst at Capital Group, was leaked in which he said Syriza’s policies were “worse than communism.” Sponer reportedly wrote the email after attending a conference in London in which Milios presented the party’s economic manifesto. But Milios was quick to defend his policies, saying that such comments were “government propaganda.” “This saying that we are worse than communists was not something that represented the whole climate of discussions in London. I think this… had to do with the present government and to do with propaganda,” he told CNBC Europe’s “Squawk Box” on Tuesday.

Investors are particularly concerned that a Syriza-led government could result in the undoing of the austerity policies implemented under Samaras’ present government. The party has always said it would “tear up” the tough conditions of Greece’s bailout, which were required by the troika of international creditors, the EU, IMF and ECB. The Athens stock exchange fell up to 10% on Monday, before paring some losses, and was trading 0.3% lower on Tuesday. Meanwhile, Greece’s borrowing costs remained above 9.5%. With a public debt to GDP ratio of 175.5%, the country has the highest debt in the euro zone, but Greece’s politicians are keen to calm European lenders that Greece isn’t about to default – or leave the single currency union.

Next month’s snap elections in Greece will be decisive for the country’s future in the eurozone, the prime minister, Antonis Samaras, said on Tuesday after requesting parliament’s dissolution. “People don’t want these elections and they aren’t necessary,” the beleaguered leader told the nation’s outgoing head of state Karolos Papoulias. “They are happening because of party self-interest … and this struggle will determine whether Greece stays in Europe.” Signalling market concerns, credit rating agency Fitch said prolonged political uncertainty could “increase the risks to Greece’s creditworthiness”. The country was forced into holding early elections after parliament failed on Monday to endorse Stavros Dimas, the government’s candidate for president.

With the debt-burdened country dependent on international rescue funds, officials said the radical left main opposition Syriza party would “pay a heavy price” for triggering the elections after joining forces with the far-right Golden Dawn to block Dimas from becoming president. Late on Monday the IMF said it would suspend aid instalments until after the 25 January poll. “People will punish those who have triggered this unnecessary turmoil, because it is obvious that Syriza has no solution [to economic problems]. It neither says where it will find the money, nor will it find the money,” said government spokeswoman Sophia Voultepsi, referring to the party’s pledge of wide-ranging social benefits if it wins power.

On the back of popular discontent over gruelling austerity, the price of €240bn (£188bn) in aid, Syriza has led polls since European elections in May. But the gap has narrowed since Samaras gambled by bringing forward the presidential election. An opinion poll on Tuesday showed a 3% lead for Syriza over Samaras’ New Democracy party. This followed the Greek finance minister Gikas Hardouvelis’ warning of economic sanctions by the European Central Bank if the anti-austerity Syriza won. Analysts predicted that Samaras, who has better personal ratings than Syriza’s leader, Alexis Tsipras, could win the elections yet.

Fears of deflation in the euro zone were heightened once again on Tuesday, after both Spain and Greece reported worse-than-expected price declines. A flash reading for consumer price index (CPI) inflation in Spain showed that prices fell by 1.1% year-on-year in December. This was below forecasts of a 0.7% drop, and followed November’s decline of 0.5%. Analysts said this month’s fall was mainly driven by weakening oil prices which could mean that other large euro zone members fall victim to deflation soon. “With a Spanish reading this low, euro area inflation might well turn negative as early as December,” said Robert Kuenzel, director of euro area economic research at Daiwa Capital Markets, in a research note on Tuesday.

Meanwhile, data out from Greece showed that producer prices declined 2.3% year-on-year in November way below October’s 0.9% fall. Consumer prices in the country fell by 1.2% in the same period. Kuenzel told CNBC that the producer price drop in Greece was worse than he expected, and was “one of the largest fall we have seen for years.” “As producer prices are more energy price-sensitive, this is still not out of line with today’s downside Spanish CPI surprise, even though that was numerically smaller,” he said via email. Brent crude oil prices fell to a 5-1/2-year low under $57 per barrel on Tuesday, extending losses into a fourth trading session. Oxford Economics has warned that a multitude of European countries face deflation next year if oil prices remain below $60, including the U.K., France, Switzerland and Italy.

If anything is certain about the new year, it is that much of the world’s stability and economic health will depend on what is done, or not done, in Europe. And what happens in Europe will depend, in large part, on German Chancellor Angela Merkel. Merkel’s leadership in 2014 was a curious mixture of boldness and timidity. It fell to her, more than any other European leader, to confront Russian President Vladimir Putin. And her efforts are what secured the unanimity among the European Union’s 28 fractious nations that was needed to impose meaningful economic sanctions to deter further Russian aggression in Ukraine. Regardless of whether those sanctions ultimately succeed, they have already served an important purpose by helping to hold the EU – with its Russophile Italians and Austrians, its Russophobe Poles and Balts – together.

As helpful as Merkel has been with Russia, however, she has so far only harmed efforts to address the faltering European economy. In 2015, as new elections in Greece bring fresh turmoil, she will need to apply some of the clarity and decisiveness she has showed in dealing with Putin to the euro zone. On both fronts, next year will be harder. Europe’s Russia challenge will get tougher, because the pressure to repeal sanctions will rise. The current measures against Russia begin to expire in March, and many European leaders will be looking for reasons not to renew them as long as something resembling a cease-fire is in place; the reduction in lending, investment and sales to Russia has hurt the European economy as well as the Russian one. Yet until there is a more meaningful settlement that ensures Putin can’t continue his semi-covert war in Ukraine, sanctions need to stay.

As for the EU, new forces for disunion will emerge. U.K. Prime Minister David Cameron will be pushing for changes in the way the bloc works that help him persuade Britons to vote against leaving it. Merkel will need to simultaneously rein Cameron in and convince other EU leaders that it would be in their interests, too, to return some powers to national governments. At the same time, the euro crisis threatens to heat up again. The favorite to win early elections in Greece next month, the neo-Marxist Syriza party, says it will refuse to carry out the further austerity measures required for the country’s remaining bailout funds. Syriza also promises to roll back economic reforms that were put in place under the terms of the country’s 240 billion euro loan program, as well as to demand a restructuring of the country’s enormous public debt. Europe’s banking system may not be as vulnerable to a Greek default as it once was, but markets have been jittery at the revived possibility of a Greek exit from the euro.

So far, Merkel has resisted relenting on austerity policies for Greece. She has been unwilling to stimulate demand in the euro area, either by boosting investment in Germany’s own low-growth economy or by letting the European Central Bank engage in large-scale quantitative easing. She should not wait for the dawn of a new government in Greece to change course on all fronts. Otherwise, Merkel may end next year not as the German leader who held Europe together, but as the one who put such strain on Europe’s currency and democracies that they began to break apart.

President Barack Obama has said Vladimir Putin made a “strategic mistake” when he annexed Crimea, in a move that was “not so smart”. Those thinking his Russian counterpart was a “genius” had been proven wrong by Russia’s economic crisis, he said. International sanctions had made Russia’s economy particularly vulnerable to changes in oil price, Mr Obama said. He also refused to rule out opening a US embassy in Iran soon. “I never say never but I think these things have to go in steps” he told NPR’s Steve Inskeep in the Oval Office. Mr Obama was giving a wide-ranging interview with NPR shortly before leaving for Hawaii for his annual holiday. He criticised his political opponents who claimed he had been outdone by Russia’s president.

“You’ll recall that three or four months ago, everybody in Washington was convinced that President Putin was a genius and he had outmanoeuvred all of us and he had bullied and strategised his way into expanding Russian power,” he said. “Today, I’d sense that at least outside of Russia, maybe some people are thinking what Putin did wasn’t so smart.” Mr Obama argued that sanctions had made the Russian economy vulnerable to “inevitable” disruptions in oil price which, when they came, led to “enormous difficulties”. “The big advantage we have with Russia is we’ve got a dynamic, vital economy, and they don’t,” he said. “They rely on oil. We rely on oil and iPads and movies and you name it.”

China’s manufacturing activity shrank for the first time in seven months in December, a private survey showed on Wednesday. The final HSBC/Markit Purchasing Managers’ Index (PMI) was at 49.6, just below the 50 level that separates growth from contraction in the sector. The reading was slightly higher than an initial “flash” number of 49.5 released earlier this month. But, the result was still down from a final reading of 50 in November. The most recent data paints an even weaker picture of the slowing Chinese economy, which has been heralded as the “factory of the world”. New factory orders contracted for the first time since April. The economic data also backs the series of surprising moves by its government to boost growth in the past two months.

In November, the country’s central bank unexpectedly cut interest rates to 2.75% for first time since 2012 in an attempt to revive the economy. Whether the world’s second biggest economy will be able to reach its growth target of 7.5% after not missing the mark for 15 years has economists questioning if more needs to be done by policymakers. While the downbeat data is not a surprise considering the preliminary reading released earlier this month, Ryan Huang, market strategist at broker IG Asia said it just adds more pressure on Beijing to introduce more measures. “There’s still bit of way to go before we see the Chinese economy reviving,” he told the BBC. “They [the central bank] have been doing [banks’] reserve requirement ratio cuts, loan to deposit ratios have been lowered to help lending conditions – we’ll probably see more of this happening.”

Recently, we wrote a paper about the dynamics behind the boom and bust cycles, based on the view of the Austrian School (the Austrian Business Cycle Theory, or ABCT). The key takeaway was that central banks don’t help in smoothing the amplitude of the cycles, but rather are the cause of cycles. Business cycles are a direct result of excessive credit flow into the market, facilitated by an intentionally low interest rate set by the government. The problem with ongoing monetary policies is that the excessive money supply sends the wrong signals to the market, which ultimately leads to misallocation of investments or ‘malinvestments’.

On the one hand, entrepreneurs invest more and increase the depth of the production process. On the other hand, consumers spend more as saving becomes unattractive. When the excess products created through the cheap money-induced investments reach the market, consumers are unable to buy them due to the lack of prior savings. At this point the bust occurs. It is key to understand that by manipulating interest rates (particularly by lowering them), central banks create bubbles that end in busts. Japan is an excellent case study depicting the scenario discussed by the Austrian Business Cycle Theory (ABCT). In this article, we will examine the course of the economic and monetary situation in Japan from the ABCT’s point of view.

The latest quarterly GDP release in Japan was a real disaster. Economists had forecast a GDP growth between 2.2% and 2.5% but the result was a contraction of 1.6% on an annualized basis (i.e., -0.5% on a quarterly basis). That comes after a quarter in which GDP had already fallen 7.3% on an annualized basis (i.e., -1.9% on a quarterly basis). The money printing frenzy has taken gigantic proportions, and the (lack of) effectiveness of the excessive money creation is visible in the charts. The first chart below shows the annual monetary base expansion (the black line) since 1990. The GDP year-on-year growth is shown in the green line. Notice how the monetary base had exploded in 2013 but the steepness of the rise was slightly reduced in 2014. Even with this slight pull back in monetary growth, the GDP growth is truly collapsing.

The name Dick Usher is familiar to regular readers: he was the head of spot foreign exchange for JPMorgan, and the bank’s alleged chief FX market manipulator, who was promptly fired after it was revealed that JPM was the bank coordinating the biggest FX rigging scheme in history, as initially revealed in “Another JPMorganite Busted For “Bandits’ Club” Market Manipulation.” Subsequent revelations – which would have been impossible without the tremendous reporting of Bloomberg’s Liam Vaughan – showed that JPM was not alone: as recent legal actions confirmed, virtually every single bank was also a keen FX rigging participant. However, the undisputed ringleader was always America’s largest bank, which would make sense: having a virtually unlimited balance sheet, JPM could outlast practically any margin call, and make money while its far smaller peers were closed out of trades… and existence.

But while the past year revealed that FX rigging was a just as pervasive, if not even more profitable industry for banks than the great Libor-fixing scandal, the conventional wisdom was that it involved almost exclusively bankers at the largest global banks including JPM, Goldman, Deutsche, Barclays, RBS, HSBC, and UBS. Now, courtesy of some more brilliant reporting by Vaughan, we can finally link banks with the other two facets of what has emerged to be an unprecedented FX-rigging “triangle” cartel: private sector companies that have no direct banking operations yet who have intimate prop trading exposure, as well as central banks themselves. By “banks” we, of course, refer to the ringleader itself: JP Morgan, and its former head of spot forex trading in London, Dick Usher. As for the company that benefited from its heretofore secret participation in the biggest FX rigging scandal in history, it is none other than British Petroleum.

We learn about all this thanks to a story that begins with, of all thing, a story about freshwater fishing at a lake in Essex called “Wharf Pool.” As Bloomberg reports, “an hour away by train, in London’s financial district, the lake’s owners ply their trade. Wharf Pool was purchased for about 250,000 pounds ($388,000) in 2012 by Richard Usher, the former JPMorgan Chase & Co. trader at the center of a global investigation into corruption in the foreign-exchange market, and Andrew White, a currency trader at oil company BP Plc. ” The plot thickens: was there more than a passing connection between the head FX trader at JPM and White “who’s known in the market as Tubby, is one of half a dozen spot currency traders working for British Petroleum (BP) in London. He and his colleagues, most of them ex-bankers, decide which firms will carry out their foreign-exchange transactions. That makes them prized clients for banks seeking a slice of the business and a glimpse into potentially market-moving trades. Passing on information was a way to curry favor.”

In short, a typical Over The Counter relationship between a banker and a buyside client, one which is largely unregulated and where the bank hopes to be able to frontrun the client’s orders by providing the client with confidential market moving information, thus generating more business with the client in the future. In this case, however, the buyside client was not a typical hedge fund, but the FX trading group at one of the world’s largest energy companies: a group which trades enormous amounts of FX every single day, both with intent to hedge, and to generate a profit.

BP is investigating whether in-house financial traders at the oil and gas group were involved in a foreign exchange manipulation scandal that has led regulators to levy $4.3 billion in fines on six banks. The UK group launched an internal review of its currency trading operations in London last year when regulators first started probing banks over their foreign exchange activities. A person familiar with the situation said the inquiry was “ongoing”. Additional questions about the potential involvement of BP’s traders in alleged attempts to rig the world’s $5.3 trillionn-a-day forex markets have been prompted by a Bloomberg report that bank employees tipped off the oil and gas group ahead of some big currency trades.

Bloomberg cited three undated messages sent to BP’s traders by the powerful network of senior foreign-exchange traders calling themselves “The Cartel” at four banks — JPMorgan, Barclays, UBS and Citigroup. It said BP was given “valuable information” about planned currency trades “sometimes hours before they happened”. But it could not be determined whether any BP employees acted on any information received. BP is not being investigated by financial regulators, said people familiar with the situation. But the report raises uncomfortable questions for the group at a time when it is being scrutinised as part of the European Commission probe into potential price fixing in oil markets.

Prisons employ and exploit the ideal worker. Prisoners do not receive benefits or pensions. They are not paid overtime. They are forbidden to organize and strike. They must show up on time. They are not paid for sick days or granted vacations. They cannot formally complain about working conditions or safety hazards. If they are disobedient, or attempt to protest their pitiful wages, they lose their jobs and can be sent to isolation cells. The roughly 1 million prisoners who work for corporations and government industries in the American prison system are models for what the corporate state expects us all to become. And corporations have no intention of permitting prison reforms that would reduce the size of their bonded workforce. In fact, they are seeking to replicate these conditions throughout the society.

States, in the name of austerity, have stopped providing prisoners with essential items including shoes, extra blankets and even toilet paper, while starting to charge them for electricity and room and board. Most prisoners and the families that struggle to support them are chronically short of money. Prisons are company towns. Scrip, rather than money, was once paid to coal miners, and it could be used only at the company store. Prisoners are in a similar condition. When they go broke—and being broke is a frequent occurrence in prison—prisoners must take out prison loans to pay for medications, legal and medical fees and basic commissary items such as soap and deodorant. Debt peonage inside prison is as prevalent as it is outside prison.

States impose an array of fees on prisoners. For example, there is a 10% charge imposed by New Jersey on every commissary purchase. Stamps have a 10% surcharge. Prisoners must pay the state for a 15-minute deathbed visit to an immediate family member or a 15-minute visit to a funeral home to view the deceased. New Jersey, like most other states, forces a prisoner to reimburse the system for overtime wages paid to the two guards who accompany him or her, plus mileage cost. The charge can be as high as $945.04. It can take years to pay off a visit with a dying father or mother.

Fines, often in the thousands of dollars, are assessed against many prisoners when they are sentenced. There are 22 fines that can be imposed in New Jersey, including the Violent Crime Compensation Assessment (VCCB), the Law Enforcement Officers Training & Equipment Fund (LEOT) and Extradition Costs (EXTRA). The state takes a percentage each month out of prison pay to pay down the fines, a process that can take decades. If a prisoner who is fined $10,000 at sentencing must rely solely on a prison salary he or she will owe about $4,000 after making payments for 25 years. Prisoners can leave prison in debt to the state. And if they cannot continue to make regular payments—difficult because of high unemployment—they are sent back to prison. High recidivism is part of the design.

China, one of the world’s largest ’emerging’ investors, is ramping up investment in Sub Saharan Africa as it searches for natural resources, but whether the benefits are mutually beneficial is questionable. China’s economic growth has been a key narrative in the story of economic miracle over the past two decades. (Its foreign direct investment) FDI in particular has played a prominent role in economic interactions with many developing countries. Once a major recipient of FDI, it’s now one of the largest ’emerging’ investors, especially in Sub Saharan Africa countries, it has investments being in Nigeria, Sudan, South Africa and Angola among others.

The Asian economic super power is in pursuit of oil, gas, precious metals and mining to diversify its energy resource import’s pool; it requires other resources to sustain its manufacturing capabilities. Africa can offer all of these things to the world’s second largest economy: about 40% of global reserves of natural resources, 60% of uncultivated agricultural land, a billion people with rising purchasing power and a potential army of low-wage workers. Like many emerging markets, African countries are one of the fastest growing markets and profitable outlets for exported manufactured goods. In the past, the U.K. and France were the prime trade partners for Africa, however, today, China is Africa’s top bi-lateral trading partner with trade volume exceeding $166 billion. Between years 2003 and 2011, its FDI in the continent has increased thirty fold from $491 million to $14.7 billion.

This is more than just a trend. Not a long time ago, China eyed areas in Africa where resources were abundant and easy to extract. It focused on resource-rich countries such as Algeria, Nigeria, South Africa, Sudan and Zambia. Today, Sino-African investment focus has become broader. China is branching out into non-resource-rich investments, focusing on countries such as Ethiopia and Congo. Higher margins have attracted many state-owned enterprises and private companies to compete on gaining dominion in the vast continent. Oil, gas, metals and minerals constitute three-quarters of African-exports to China. Chinese Imports to Africa are more diverse, mostly comprised of manufactured goods.

Ebola is wrecking years of health and education work in Sierra Leone and Liberia following their civil wars, forcing many charity groups to suspend operations or re-direct them to fighting the epidemic. More than a decade of peace and quickening economic growth had raised hopes that the nations could finally reduce their dependency on foreign aid and budgetary support; now Ebola has undermined those achievements, charity workers and officials say. “The impact of Ebola will take us completely back to it being a basket case,” said Rocco Falconer, CEO of educational charity Planting Promise in Sierra Leone. “The impact on some activities have been simply catastrophic.”

The two countries worst hit by Ebola have struggled to recover from the wars that raged through the 1990s until early in the 21st century, killing and maiming tens of thousands, and devastating already poor infrastructure. In Sierra Leone, aid made up one-fifth of economic output in 2010, according to officials, though this had been shrinking as growth accelerated thanks to a boom in the country’s commodities exports. Britain and the European Union are the main donors with funds directed to health, education and social assistance. But Planting Promise’s experience typifies the problems of non-government organisations (NGOs) since Ebola hit West Africa, infecting more than 20,000 people and killing nearly 8,000.

It had spent six years in Sierra Leone developing farms and using the profits to fund local schools. The project had just become self-financing for the first time when the outbreak was detected in March. After that, things fell apart. Planting Promise was forced to withdraw its expatriate staff in June and the following month it closed its five primary schools where nearly 1,000 pupils had studied. It has also shut down its food processing factory. Though sales have dived, it continues to pay about 120 staff, eating into its reserves. This has forced the group to return “cap in hand” to donors to ask for more money, Falconer said.

The latest round of international climate talks this month in Lima, Peru, melting glaciers in the Andes and recent droughts provided a fitting backdrop for the negotiators’ recognition that it is too late to prevent climate change, no matter how fast we ultimately act to limit it. They now confront an issue that many had hoped to avoid: adaptation. Adapting to climate change will carry a high price tag. Sea walls are needed to protect coastal areas against floods, such as those in the New York area when Superstorm Sandy struck in 2012. We need early-warning and evacuation systems to protect against human tragedies, such as those caused by Typhoon Haiyan in the Philippines in 2013 and by Hurricane Katrina in New Orleans in 2005.

Cooling centers and emergency services must be created to cope with heat waves, such as the one that killed 70,000 in Europe in 2003. Water projects are needed to protect farmers and herders from extreme droughts, such as the one that gripped the Horn of Africa in 2011. Large-scale replanting of forests with new species will be needed to keep pace as temperature gradients shift toward the poles. Because adaptation won’t come cheap, we must decide which investments are worth the cost. A thought experiment illustrates the choices we face. Imagine that without major new investments in adaptation, climate change will cause world incomes to fall in the next two decades by 25% across the board, with everyone’s income going down, from the poorest farmworker in Bangladesh to the wealthiest real estate baron in Manhattan. Adaptation can cushion some but not all of these losses.

What should be our priority: reduce losses for the farmworker or the baron? For the farmworker, and a billion others in the world who live on about $1 a day, this 25% income loss will be a disaster, perhaps the difference between life and death. Yet in dollars, the loss is just 25 cents a day. For the land baron and other “one-percenters” in the U.S. with average incomes of about $2,000 a day, the 25% income loss would be a matter of regret, not survival. He’ll find a way to get by on $1,500 a day. In human terms, the baron’s loss pales compared with that of the farmworker. But in dollar terms, it’s 2,000 times larger.

Newspapers can seem like a rude intrusion into the Christmas holidays. We celebrate peace, goodwill and family – and then along come the headlines, telling us what’s going wrong in the world. Simon and Garfunkel made this point in 7 O’Clock News/Silent Night, a song juxtaposing a carol with a newsreader bringing bad tidings. But this is the nature of news. Whether it’s pub gossip or television bulletins, we’re more interested in what’s going wrong than with what’s going right. Judging the world through headlines is like judging a city by spending a night in A&E – you only see the worst problems. This may have felt like the year of Ebola and Isil but in fact, objectively, 2014 has probably been the best year in history.

Take war, for example – our lives now are more peaceful than at any time known to the human species. Archaeologists believe that 15% of early mankind met a violent death, a ratio not even matched by the last two world wars. Since they ended, wars have become rarer and less deadly. More British soldiers died on the first day of the Battle of the Somme than in every post-1945 conflict put together. The Isil barbarity in the Middle East is so shocking, perhaps, because it comes against a backdrop of unprecedented world peace. We have recently been celebrating a quarter-century since the collapse of the Berlin Wall, which kicked off a period of global calm.

The Canadian academic Steven Pinker has called this era the “New Peace”, noting that conflicts of all kinds – genocide, autocracy and even terrorism – went on to decline sharply the world over. Pinker came up with the phrase four years ago, but only now can we see the full extent of its dividends. With peace comes trade and, ergo, prosperity. Global capitalism has transferred wealth faster than foreign aid ever could. A study in the current issue of The Lancet shows what all of this means. Global life expectancy now stands at a new high of 71.5 years, up six years since 1990. In India, life expectancy is up seven years for men, and 10 for women. It’s rising faster in the impoverished east of Africa than anywhere else on the planet. In Rwanda and Ethiopia, life expectancy has risen by 15 years.

This helps explain why Bob Geldof’s latest Band Aid single now sounds so cringingly out-of-date. Africans certainly do know it’s Christmas – a Nigerian child is almost twice as likely to mark the occasion by attending church than a British one. The Ebola crisis has led to 7,000 deaths, each one a tragedy. But far more lives have been saved by the progress against malaria, HIV and diarrhoea. The World Bank’s rate of extreme poverty (those living on less than $1.25 a day) has more than halved since 1990, mainly thanks to China – where economic growth and the assault on poverty are being unwittingly supported by any parent who put a plastic toy under the tree yesterday.